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Futures up: Dow 0.06%, S&P 0.30%, Nasdaq 0.51%

May 28 (Reuters) - U.S. stock index futures ticked

higher on Tuesday after a holiday-extended weekend, as investors

awaited a key inflation report later in the week that could test

expectations of the Federal Reserve's monetary policy outlook.

The tech-heavy Nasdaq and the benchmark S&P 500

managed to notch their fifth-straight week of gains on

Friday, a positive end to a week that saw investors rethink

their bets on when the world's most influential central bank

could reduce interest rates.

Expectations on when the Fed might kick off policy easing

have see-sawed through the year. Policymakers continue to

dismiss the need for imminent rate cuts as data reflects a

still-resilient economy.

Traders see a 51.2% chance that the first rate cut of at

least 25 basis points could be delivered in September, compared

with a 49.4% probability seen on Friday, according to the CME

FedWatch Tool.

The yield on U.S. Treasury bonds, an indicator of rate

expectations, ticked lower and boosted chip stocks, led by a

2.5% rise in AI darling Nvidia ( NVDA ), after closing at a

record high on Friday.

The "T+1" settlement cycle will be implemented starting from

Tuesday's session, with analysts foreseeing extreme price

volatility. The reform, designed to reduce counterparty risk and

improve market liquidity, will ensure the settlement of trades

in one business day rather than two.

"Banks and the exchanges have been planning this for months,

and this week we will see if the machine runs smoothly or if

there will be some early missteps," said Kathleen Brooks,

research director at XTB.

After data on Friday showed consumer mood on inflation

expectations was improving, markets will parse the U.S. core

Personal Consumption Expenditures Price Index report for April

later in the week. The Fed's preferred inflation barometer is

expected to hold steady on a monthly basis.

Other data includes the second estimate for first-quarter

gross domestic product and the Fed's Beige Book, along with

remarks from a number of central bankers due through the week.

Minneapolis Fed President Neel Kashkari said in an interview

with CNBC broadcast that the U.S. central bank should wait

before cutting interest rates, adding that it could potentially

even hike rates if inflation fails to fall further.

At 5:40 a.m. ET, Dow e-minis were up 24 points, or

0.06%, S&P 500 e-minis were up 15.75 points, or 0.30%,

and Nasdaq 100 e-minis were up 95.5 points, or 0.51%.

UBS Global Research raised its year-end target for the

benchmark S&P 500 index, hovering just below all-time highs, to

5,600 from an earlier projection of 5,400, marking the highest

forecast among major brokerages.

Apple ( AAPL ) outperformed megacaps, up 2.4% after iPhone

sales in China jumped 52% in April from a year earlier, Reuters

calculations based on industry data showed.

Meme stock GameStop ( GME ) shot up 20.5% after the

videogame retailer said late on Friday it had raised $933

million by selling 45 million shares as part of "at-the-market"

offering.