March 26 (Reuters) - U.S. stock index futures bounced back on Tuesday as megacap growth stocks and chipmakers advanced, while investors awaited more economic data in a holiday-shortened week to assess the Federal Reserve's rate-cut path.
Wall Street ended the previous session slightly lower, with the S&P 500 (.SPX), opens new tab and the blue-chip Dow (.DJI), opens new tab easing from their best weekly performances so far this year.
The spotlight remains on a crucial February reading of the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, due on Friday, when U.S. markets will be shut for the Good Friday holiday.
"We believe that higher inflation prints for January and February were partly driven by temporary noise in the data, and expect more favorable numbers over the rest of 2024 to result in a lower inflation rate at the end of the year," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
The index is expected to have risen 0.4% in February and 2.5% on an annual basis. Core inflation, which excludes volatile food and energy components, is estimated to have risen 0.3% last month, which would keep the annual pace at 2.8%, according to economists polled by Reuters.
A hot reading for the PCE index can potentially hamper market optimism around early rate cuts.
Wall Street rallied to fresh record highs last week when Fed Chair Jerome Powell said the recent high inflation readings had not changed the underlying "story" of slowly easing price pressures. He also said the central bank was on track for three interest-rate cuts this year.
Traders see an at least 70% chance the Fed will begin its easing cycle in June, according to the CME FedWatch tool, up from a nearly 59% chance seen early last week.
Fed officials said on Monday they still believed U.S. inflation would ease, but acknowledged an increased sense of caution around the debate.
March consumer confidence and February durable goods readings are due later in the day.
Trading activity is expected to be light owing to the upcoming long weekend break.
At 07:02 a.m. ET, Dow e-minis were up 101 points, or 0.25%, S&P 500 e-minis were up 21 points, or 0.40%, and Nasdaq 100 e-minis were up 92.25 points, or 0.50%.
Megacap growth stocks edged higher in premarket trading, with Tesla (TSLA.O), opens new tab leading the charge, up 3%.
Micron Technology (MU.O), opens new tab rose 1.7% after hitting a record high in the last session, while industry giant Nvidia (NVDA.O), opens new tab gained 0.9%.
The Philadelphia Semiconductor Index (.SOX), opens new tab dipped on Monday but remained on track to end the quarter with double-digit gains this week, as an artificial intelligence-led rally lifted chipmakers.
Trump Media & Technology group surged 16.8% in trading before the bell, ahead of its first day of trading after completing a reverse merger with a blank check firm.
Dell Technologies(DELL.N), opens new tab climbed 1.7% after the firm said it had reduced its workforce as part of a broader initiative to cut costs that included limiting external hiring and employee reorganizations.
United Parcel Service(UPS.N), opens new tab rose 2.5% on forecasting better-than-expected 2026 consolidated revenue.
Doughnut chain Krispy Kreme (DNUT.O), opens new tab jumped 14% after announcing an expansion of its national partnership with McDonald's (MCD.N), opens new tab.
Reporting by Shashwat Chauhan and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty and Pooja Desai
