(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, 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 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 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.