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Futures down: Dow 0.15%, S&P 500 0.18%, Nasdaq 0.22%

Oct 10 (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 ( GXO ) jumped 5.1% after a report that the

company is exploring a potential sale after it received takeover

interest.