U.S. stock index futures inched higher on Tuesday as investors awaited a clutch of economic reports and clung to hopes of a half-percentage-point rate cut at the Federal Reserve's monetary policy meeting, which starts later in the day.

The S&P 500 ended its sixth straight session higher and near a record high on Monday, helped by Financials and Energy stocks.

The Dow also closed at a record high. However, the Nasdaq ended the session lower as investors rotated away from tech stocks, which have led much of this year's rally.

Microsoft rose 1.60% in premarket trading on the day after the AI-frontrunner's board approved a new $60-billion share buyback program and hiked its quarterly dividend by 10%.

Among growth stocks, Alphabet and Meta added 0.50% and 0.36%, respectively, while Nvidia inched up 0.81%. The yield on two-year Treasury bonds hovered near levels last seen over a year ago.

At 07:09 a.m. ET, Dow E-minis were up 85 points, or 0.20%, S&P 500 E-minis were up 15.25 points, or 0.27% and Nasdaq 100 E-minis were up 87 points, or 0.45%.

Reports on industrial production and retail sales for August, expected through the day, are among the last datasets before the Fed's highly anticipated two-day meeting.

Traders are betting on a 65% probability the world's most influential central bank will decide to lower borrowing costs by a bigger 50 basis points, according to the CME Group's FedWatch Tool.

Odds favoring a smaller 25 bps reduction have slipped to 35% from 66% a week earlier, as investors focused on remarks from a former policymaker supporting an outsized move and signs of a cooling labor market, among other indicators.

Starting with a 50-basis-point cut accompanied by a calm, cautious message could give the Fed a headstart without spooking the markets, Gabriele Foà, portfolio manager at Algebris Investments, said in a note.

"Starting with 25 basis points requires a more dovish message to satisfy market pricing for the remainder of the year," he said.

September has historically been weak for U.S. equities, with the benchmark S&P 500 down about 1.20% for the month on an average since 1928. The index has lost about 0.30% so far this September.

Still, a survey of BofA fund managers showed global investor sentiment improved in September 2024 for the first time since June on optimism around a soft landing and rate cuts by the U.S. Federal Reserve.

Among other movers, Intel jumped 7.0% after signing up Amazon.com's cloud services unit as a customer to make custom artificial-intelligence chips.

Viasat dropped 4.2% after brokerage J.P.Morgan downgraded it to "neutral" from "overweight". Hewlett Packard Enterprise gained 3.4% after BofA Global Research upgraded the server maker to "buy" from "neutral".

SolarEdge fell 6.6% after Jefferies downgraded the solar inverter maker to "underperform" from "hold" and slashed its price target to the lowest on Wall Street.

(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)