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* Coty gains on raising sales forecast
* Federal Reserve rate verdict due at 2 p.m. ET
* Pinterest gains on Citigroup upgrade, share buyback
* Futures up: Dow 0.28%, S&P 0.26%, Nasdaq 0.22%
Sept 20 (Reuters) - U.S. stocks were set to rise at open on Wednesday as Treasury yields retreated ahead of a likely pause in the Federal Reserve's policy tightening campaign, though concerns over rates staying higher for longer kept investor sentiment in check.
The U.S. central bank is expected to maintain its key rate in the range of 5.25%-5.50% as it concludes its meeting at 2 p.m. ET, with investors focused on economic projections and Chair Jerome Powell's comments for clues on the outlook for rates and inflation.
Recent economic data has signaled an easing in core inflation, fuelling bets that interest rates have likely peaked, but a surge in oil prices has clouded the outlook for headline inflation, providing the Fed room to keep rates higher for longer.
Oil prices, however, fell on Wednesday amid a lack of clarity on energy demand, while Treasury yields retreated from their 2007 highs hit in the previous session.
Uncertainty around the rates trajectory and concerns over the state of the U.S. economy sparked a selloff on Tuesday, with Canada's inflation rate accelerating on higher gasoline prices and a steeper-than-expected plunge in U.S. housing starts.
Bank of America's finance chief Alastair Borthwick said U.S. consumers remained in good shape, reducing the likelihood of an economic slowdown.
"Keeping rates higher for longer, above 5%, well into 2024 hasn't always been the expectation and that puts some pressure on equities. The expectation today is of a hawkish pause," said Keith Buchanan, portfolio manager at GLOBALT Investments.
Financial markets have priced in a 99% chance the Fed will pause rates on Wednesday and a near 71% likelihood the central bank will keep them unchanged in November, according to CME's FedWatch tool.
Investors also looked forward to marketing automation company Klaviyo's debut on the New York Stock Exchange, in a third big test for the market for new issues following smooth listings of Arm Holdings and Instacart.
The Boston-based company had secured a valuation of $9.2 billion in its initial public offering after pricing the shares above their indicated range.
Instacart lost 5.5% in premarket trading, and was on course to join other new entrants in failing to hold on to their strong gains on debut. Arm Holdings was down 0.9%.
At 8:30 a.m. ET, Dow e-minis were up 97 points, or 0.28%, S&P 500 e-minis were up 11.75 points, or 0.26%, and Nasdaq 100 e-minis were up 34 points, or 0.22%.
Dollar General fell 2.0% after J.P. Morgan downgraded the discount store operator to "underweight".
Pinterest added 4.4% as Citigroup upgraded the image-sharing platform to "buy" from "neutral" and as the firm announced a share buyback of up to $1 billion.
Coty added 6.1% after the CoverGirl parent raised its annual like-for-like sales forecast. (Reporting by Ankika Biswas and Shristi Achar A in Bengaluru; Editing by Arun Koyyur and Vinay Dwivedi)
