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Futures: Dow flat, S&P 500 up 0.07%, Nasdaq up 0.18%

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Nvidia ( NVDA ) results due after markets close

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Azul ( AZUL ) falls on bankruptcy filing

(Updates with analyst comments, prices)

By Shashwat Chauhan and Kanchana Chakravarty

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

on Wednesday after a sharp rally in the previous session, when

cooling tariff tensions buoyed sentiment, as investors awaited

AI bellwether Nvidia's ( NVDA ) upcoming earnings and developments on the

global trade front.

Nvidia ( NVDA ) is expected to report a 66.2% surge in

first-quarter revenue, according to data compiled by LSEG.

Shares of the chipmaker rose 0.6% in premarket trading ahead of

its results, due to be released after markets close.

Traders in the options markets are bracing for industry-wide

volatility, with defensive options contracts drawing heavy

attention for the VanEck Semiconductor ETF, the largest

semiconductor ETF.

At 06:42 a.m. ET, Dow E-minis were down 2 points, or

0%, S&P 500 E-minis rose 4.25 points, or 0.07%, and

Nasdaq 100 E-minis added 39 points, or 0.18%.

Most megacap and growth stocks traded marginally higher

after Tuesday's surge, with Nvidia ( NVDA ) and Tesla leading

gains.

All three main Wall Street indexes soared in the last

session, after U.S. President Donald Trump backed down over the

weekend from his 50% tariff threat against the European Union.

The implementation of the tariffs is now delayed until July

9 to allow for negotiations between the White House and the EU.

"We do not expect a smooth path to agreement, and with the

S&P 500 now just 4% from its record high in February, we believe

further gains this year are likely to be relatively limited,"

Mark Haefele, chief investment officer at UBS Global Wealth

Management, said in a note.

U.S. equities are on track for robust monthly gains, with

the S&P 500 as well as the Nasdaq set for their

best monthly showing since November 2023, as easing concerns

around global trade, upbeat earnings and tame inflation data

boosted risk appetite.

The S&P 500 is now about 4% off its record closing high

reached on February 19, having plunged as much as 18.9% below

that level in the wake of Trump's erratic tariff announcements

that have whipsawed markets for much of his second term.

Minutes from the U.S. Federal Reserve's last policy meeting,

when the central bank held borrowing costs steady, are slated

for release at 2 p.m. ET.

Personal Consumption Expenditure data - the Fed's favored

inflation indicator - for April, as well as a second estimate of

first-quarter GDP, are scheduled to be released later this week.

New York Fed President John Williams said central banks must

"respond relatively strongly" when inflation begins to deviate

from their target, given the high uncertainty around the

economic impact of U.S. tariffs and trade policy.

Yields on long-dated U.S. government bonds were slightly

higher after scaling multi-month highs last week. Those on the

10-year note were up 4.1 basis points to 4.47%.

Global bond markets have been in the spotlight lately over

concerns about fiscal sustainability in major economies

including the United States and Japan.

U.S-listed shares of Brazilian airline Azul ( AZUL ) plunged

more than 40% after it filed for Chapter 11 bankruptcy.

Cybersecurity firm Okta ( OKTA ) flagged risks related to

the uncertain economic environment but stuck to its full-year

outlook. Its shares dropped 12.6%.