* Futures: Dow up 3 pts, S&P up 0.25 pts, Nasdaq down 2.5 pts
By Yashaswini Swamynathan
July 25 (Reuters) - U.S. stock index futures were flat on Monday as investors braced for another set of corporate earnings and ahead of the Federal Reserve's policy meeting.
* The Fed, which has had to defer raising interest rates, will commence its two-day meeting on Tuesday to decide whether the U.S. economy could absorb a rate increase in the near term.
* The policy-setting Federal Open Market Committee is scheduled to announce its decision on Wednesday at 2:00 p.m. ET (1800 GMT).
* Even with recent data pointing to the U.S. economy being on strong footing, global uncertainty sparked by Britain's vote to leave the European Union has left the Fed jittery over the impact of a hike.
* Traders have priced in a 14.7 percent chance of a rate hike in September and a 38.5 percent chance in December, according to CME Group's FedWatch tool.
* Low expectations of rate hikes, robust economic data and higher-than-expected second-quarter earnings set Wall Street on a record-setting streak in the past two weeks. Investors are hopeful that companies continue a broad trend of beating analysts' expectations to justify valuations.
* Wall Street closed higher on Friday, helped by gains in telecom stocks and strong manufacturing data.
* Yahoo shares were up 0.3 percent at $39.50 before being halted. Verizon agreed to buy Yahoo's core internet business for $4.83 billion. Verizon's shares rose 0.3 percent.
* Oil prices were trading near two-month lows on fears of global oversupply and economic headwinds that could hit demand.
* Tesla-acquisition target SolarCity's shares rose 4 percent to $27.46 after Reuters reported on Saturday that the company was close to agreeing to be bought for $2.8 million. Tesla was yet to trade.
Futures snapshot at 6:55 a.m. ET:
* Dow e-minis were up 3 points, or 0.02 percent, with 20,483 contracts changing hands.
* S&P 500 e-minis were up 0.25 points, or 0.01 percent, with 129,470 contracts traded.
* Nasdaq 100 e-minis were down 2.5 points, or 0.05 percent, on volume of 16,453 contracts. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)