European stock indexes struggled for direction on Tuesday and Wall Street futures saw small gains, as the equity rally slowed and investors weighed up the outlook for central bank rate cuts, ahead of key inflation data later in the week.

Global equity markets have surged so far this year, helped by investor enthusiasm around artificial intelligence (AI) and expectations that major central banks will cut interest rates.

The MSCI World Equity index hit fresh all-time highs last week, following chipmaker Nvidia's quarterly report.

At 1124 GMT on Tuesday it was steady just below last week's highs, up by less than 0.1% on the day.

MSCI's Europe index was up 0.2%. London's FTSE 100 was down 0.1%, and the pan-European STOXX 600 was flat . Germany's DAX was up 0.4%.

While stocks have rallied in recent months, bond markets have seen yields rise, as investors push back their expectations for rate cuts.

"There's a bit of a divergence there between what bonds see and how equities are behaving," said Hani Redha, global multi-asset portfolio manager at PineBridge.

"When the market starts to feel a little saturated with all this AI-hype, then the market starts to look around and say 'oh, where are those rate cuts that we were expecting?' and starts to realise that financial conditions will be tighter, and that's what can lead to a bit of consolidation," he said.

Markets have already pushed out the likely timing of a first Federal Reserve easing from May to June. Futures imply a little more than three quarter-point cuts this year, compared to five at the start of the month.

U.S. stock index futures pointed to a slightly positive open for Wall Street, with S&P 500 e-minis up just 0.1% and Nasdaq e-minis up 0.2%.

The U.S. dollar index was little changed at 103.73, and the euro was also flat at $1.08525.

European government bond yields were mixed, with the benchmark 10-year German yield flat at 2.431%.

The Japanese yen strengthened against the dollar, recovering from a three-month low at 150.37, after Japan's core consumer inflation beat forecasts and held at the central bank's 2% target, reinforcing expectations that the Bank of Japan will end negative rates by April.

A survey showed that German consumer sentiment is expected to stabilize at a low level in March. France's consumer confidence unexpectedly fell in February from the previous month as inflation worries weighed again.

Consumer confidence data for the U.S. is due later in the session, but more important for traders is inflation data due later in the week.

February flash inflation data for France and Germany is due on Thursday, and for the euro zone as a whole on Friday.

January's U.S. personal consumption expenditures price index, which is the Fed's preferred measure of inflation, is due on Thursday.

U.S. Treasury markets are also expected to come under pressure from large Treasury auctions, of $127 billion on Tuesday and $42 billion on Wednesday.

"Aside from the inflation data and the robust growth data which have been leading yields to drift higher, there's also just a large amount of supply of treasuries coming from the U.S. Treasury in terms of net issuance," said PineBridge's Redha.

"That needs to be absorbed by the market and tends to push yields higher."

Oil prices fell, with Brent crude futures down 0.5% at $82.15 a barrel, and U.S. West Texas Intermediate crude futures (WTI) down 0.4% at $77.24 a barrel.

Gold was up 0.2% at $2,035.62.

Cryptocurrency bitcoin was up around 3.5% at $56,560.

(Reporting by Elizabeth Howcroft and Tom Westbrook Editing by Ros Russell and Mark Potter)