March 18 (Reuters) - Futures for the S&P 500 and the Nasdaq gained on Monday ahead of the U.S. Federal Reserve's meeting this week, where the central bank is expected to keep borrowing costs steady and provide cues on its monetary policy path for the year.
Stronger-than-expected inflation, opens new tab figures last week have prompted investors to rethink when and by how much policymakers will lower rates this year, with traders pulling back bets of a June rate cut to around 59% from 71% last Monday, according to the CME FedWatch Tool.
Nevertheless, Wall Street, led by optimism around artificial intelligence (AI), hit fresh all-time highs in March, before pulling back some gains last week.
A hawkish tilt by the Fed in its policy meeting that concludes on Wednesday could further pressure the high-flying indexes.
"While the recent pullback in tech stocks may follow fears that the market has run too far and portfolios are too concentrated, we believe investors can find compelling diversification opportunities through the next AI leaders," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Investors eyed chipmaker Nvidia's (NVDA.O), opens new tab GTC developer conference from March 18 to 21, which will be parsed for AI-related announcements. Shares of the AI giant rose 2.3% in premarket trading.
Peers Micron Technology (MU.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab added 2.8% and 1.3%, respectively.
Exchange operator Nasdaq (NDAQ.O), opens new tab said it has resolved an issue related to connectivity and stock orders after more than two hours.
At 7:00 a.m. ET, Dow e-minis were down 30 points, or 0.08%, S&P 500 e-minis were up 19.5 points, or 0.38%, and Nasdaq 100 e-minis were up 136.5 points, or 0.76%.
Most megacap growth and technology shares also advanced in trading before the bell.
Alphabet(GOOGL.O), opens new tab gained 4.4% after a media report that Apple (AAPL.O), opens new tab is in talks to build Google's Gemini AI engine into the iPhone.
Tesla(TSLA.O), opens new tab rose 2.8% after the electric carmaker said it would increase the price of its Model Y EVs in some European countries on March 22, by approximately 2,000 euros ($2,177) or its equivalent in local currencies.
U.S.-listed shares of Xpeng climbed 6.2% on the company's plans to launch a cheaper EV brand amid fierce price competition.
Boeing (BA.N), opens new tab shed 1.0% after a media report that a federal grand jury in Seattle issued a subpoena to the planemaker over the Jan. 5 midair blowout of a Boeing door plug on an Alaska Airlines flight.
Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.
Reporting by Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru; Editing by Pooja Desai and Maju Samuel
