(Reuters) - U.S. stock index futures declined on Thursday as investors braced for a highly anticipated inflation report, which is expected to provide more clarity on the monetary policy direction for the remainder of the year.

At 5:23 a.m. ET, Dow E-minis were down 63 points, or 0.15%, S&P 500 E-minis were down 10.5 points, or 0.18% and Nasdaq 100 E-minis were down 44.5 points, or 0.22%.

The S&P 500 and the Dow notched up record closing highs on Wednesday, after minutes from the Federal Reserve's last meeting showed a "substantial majority" of policymakers had favored September's outsized 50-basis-point rate cut.

In the wake of strong economic data over the past week, traders have steadily decreased bets on a 50-basis-point rate reduction at the Fed's next meeting, now pricing in an 82% chance of a 25-bps cut in November and an 18% chance of no change at all.

Thursday's consumer price index report is now in focus for insight on the central bank's battle with inflation and its implications for borrowing costs.

September's CPI is forecast to show core inflation holding steady at 3.2% on an annual basis, while slipping slightly to 0.2% month-over-month, according to economists Reuters polled.

"The CPI report is likely to show that inflation has leveled off and perhaps even cooled further. Price stability is likely to prove critical to extending the economic cycle," said Scott Helfstein, head of investment strategy at Global X.

"There is little reason for the Fed to deviate from 25 bps cuts through (the) year end, given the favorable economic backdrop."

Weekly jobless claims data is also scheduled for release on the day.

Attention also shifts to the start of third-quarter earnings season, with major banks scheduled to report on Friday.

Third-quarter earnings growth rate for the S&P 500 is estimated at 5% year-over-year, according to estimates compiled by LSEG, and will be a key test for whether the recent equity rally can be sustained.

Earnings season comes at a busy point for investors as they grapple with rising Treasury yields - the benchmark 10-year Treasury note yield is trading around its highest since late July - along with the impact of the Middle East conflict on oil prices and the upcoming U.S. presidential election.

Investors were also monitoring the impact from Hurricane Milton, which made landfall on Florida's west coast late on Wednesday.

Among single movers, shares of logistics services provider GXO Logistics jumped 5.1% after a report that the company is exploring a potential sale after it received takeover interest.