U.S. stock indexes remained relatively unchanged on Tuesday as traders cautiously positioned themselves ahead of potentially market-moving reports. The S&P 500 inched up by 0.1% to 5,209.91, while the Dow Jones Industrial Average slipped by less than 0.1% to 38,883.67. Meanwhile, the Nasdaq composite gained 0.3% to reach 16,306.64.

Traders closely watched Treasury yields in the bond market, which eased ahead of an anticipated update on U.S. consumer level inflation scheduled for Wednesday. This week also brings other reports on inflation, while major U.S. companies are set to release their first-quarter profit figures. The central question hovering over Wall Street is whether inflation will sufficiently cool down to prompt the Federal Reserve to implement interest rate cuts, a move that traders have been betting on.

Recent reports on the economy have been hotter-than-expected, leading to some doubts about the possibility of interest rate cuts. Traders now predict only two or three cuts this year, down from earlier forecasts of six or seven, as per data from CME Group. With the Federal Reserve's main interest rate still at its highest level in over two decades, concerns have arisen that leaving rates too high for too long could result in a recession.

If fewer rate cuts occur this year, the onus will be on companies to deliver strong profit growth to justify the considerable increase of nearly 25% in the S&P 500 since October last year. Critics argue that stock prices appear expensive on several metrics and call for either rising profits or falling interest rates to bring them back to more reasonable levels.

Bank of America strategists are eagerly awaiting Wednesday's inflation update to observe any cooling trends, particularly when excluding food and energy prices, which can be volatile. A cooldown in inflation could increase traders' expectations for a rate cut in June, which the market currently views as slightly more likely than not.

Oil prices experienced a decline, with a barrel of benchmark U.S. crude falling $1.20 to settle at $85.23. Despite this, concerns persist about the impact of rising oil prices on core inflation, as highlighted by Bank of America strategists in a recent report.

Back on Wall Street, Apple contributed to the slight rise in the S&P 500, gaining 0.7% and reducing its year-to-date losses to below 12%. Norfolks Southern also saw a 1.3% increase in stock price, despite reporting preliminary first-quarter earnings that fell short of analysts' expectations. Conversely, some of the market's biggest losses were observed among stocks associated with artificial intelligence technology. Nvidia, one of the leading stocks in the market, dropped 2%, exerting the most significant downward pressure on the S&P 500. Similarly, Super Micro Computer declined by 2.6%, despite experiencing a more than threefold increase in stock price so far this year.

In the bond market, the yield on the 10-year Treasury eased to 4.35% from 4.42%. Overseas, European stock indexes slid in anticipation of an upcoming decision by the European Central Bank regarding interest rates, with many investors expecting rates to hold steady. Asian stock indexes displayed mixed performances, with Tokyo's Nikkei 225 gaining 1.1% while South Korea's Kospi fell by 0.5%.