The report, due at 8:30 a.m. ET, is expected to show that prices rose at a much slower pace in July due to a sharp drop in the cost of gasoline, even though food inflation is expected to remain elevated.
Economists polled by Reuters expect the Consumer Price Index to show year-on-year headline inflation of 8.7%, far above the Fed's target of 2%, but lower than last month's 9.1%.
But, core inflation is seen rising to 6.1% from 5.9%, showing that underlying inflation pressures are high.
After a rough start to the year, the benchmark S&P 500 is up near 13% from its mid-June low, largely on expectations the Federal Reserve will be less hawkish than anticipated in its efforts to provide a soft landing for the economy.
The strong jobs report last week, however, raised the stakes for the inflation numbers that are shaping up as a key test for the summer rally in equities.
The market is pricing in a 67.5% chance of a 75 basis point increase in fund rates at the Fed's next meeting in September.
At 6:50 a.m. ET, Dow e-minis were up 56 points, or 0.17%, S&P 500 e-minis were up 6.75 points, or 0.16%, and Nasdaq 100 e-minis were up 18.75 points, or 0.14%.
Megacap growth and technology stocks edged up, with Tesla Inc gaining 1.8% in premarket trading after Chief Executive Elon Musk sold $6.9 billion worth of company's shares.
He said the funds could be used to finance a potential Twitter deal if he loses a legal battle. Twitter's shares rose 3.5%.
Meta Platforms Inc added 0.5% after the Facebook-parent said on Tuesday it raised $10 billion in its first-ever bond offering.
Coinbase Global Inc fell 6.1% after it reported a larger-than-expected quarterly loss as investors, worried by the rout in risky assets, shied away from trading in cryptocurrencies.
(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur)
