* ADP report: 177,000 jobs added in August vs est. 175,000
* Nonfarm payrolls data due on Friday
* Palo Alto drops after disappointing forecast
* Futures down: Dow 2 pts, S&P 2 pts, Nasdaq 4.5 pts (Adds details, comments, updates)
By Mamidipudi Soumithri and Yashaswini Swamynathan
Aug 31 (Reuters) - Wall Street was set to open little changed on Wednesday as investors looked forward to Friday's nonfarm payrolls data for a clearer picture on the health of the economy and the timing of the next interest rate hike.
The markets have been playing a guessing game on when the Federal Reserve would be able to raise rates after top Fed officials, including Chair Janet Yellen, turned hawkish on the back of slow but steady economic growth.
Boston Fed president and voting member Eric Rosengren, in a panel discussion in China on Wednesday, said the Fed was nearing its employment and inflation rate goals, adding that rate hikes could shield the economy.
A smaller-than-expected drop in private payrolls numbers boosted investors optimism about Friday's jobs report which includes both private and public sector employment.
The U.S. private sector added 177,000 jobs in August, compared with expectations of 175,000.
The dollar index rose 0.14 percent to a three-week high after the ADP data.
Dow e-minis were down 2 points, or 0.01 percent, at 8:29 a.m. ET (1229 GMT), with 10,808 contracts changing hands.
S&P 500 e-minis were down 2 points, or 0.09 percent, with 107,396 contracts traded.
Nasdaq 100 e-minis were down 4.5 points, or 0.09 percent, on volume of 16,150 contracts.
"I think today will be very quiet. It's all about Friday morning, it's late August and most risk managers aren't going to allow traders to comes in with large positions," said John Brady, senior vice president at R.J. O'Brien & Associates in Chicago.
"I think the Fed would jog to a December rate hike, as opposed to sprint to a September rate hike," Brady said.
The markets are still skeptical of the Fed raising rates in September, given the U.S. presidential elections in November and inflation rate that rides below the Fed's 2 percent target.
Traders have priced in a 24 percent chance of a rate increase in September and a 61.3 percent chance in December, according to CME Group's FedWatch tool.
Wall Street closed lower on Tuesday, dragged down by Apple , but gains in banks helped somewhat offset the decline.
Palo Alto dropped 5 percent to $136.29 premarket on Wednesday after the cyber security firm forecast current-quarter profit and revenue below analysts' estimates.
Juno Therapeutics fell 2.3 percent to $30.82 after BTIG initiated coverage with a "sell" rating. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)