-- U.S. stock index futures rose mildly in late-evening deals on Sunday, tracking a strong session on Wall Street as positive earnings from Alphabet and Microsoft sparked a rally in technology stocks.

But sectors outside tech were a lot less enthused, especially amid mounting evidence that inflation was not easing as initially expected- a scenario that is likely to see the Federal Reserve keep interest rates higher for longer. 

The central bank is set to meet later this week. 

rose 0.1% to 5,1137.75 points, while rose 0.1% to 17,862.25 points by 19:09 ET (23:09 GMT). rose 0.1% to 38,489.0 points. 

Alphabet, Microsoft fuel bumper tech gains 

Blowout first-quarter earnings from tech giants Alphabet Inc (NASDAQ:) and Microsoft Corporation (NASDAQ:) sparked a rally across technology stocks, on hopes that demand for artificial intelligence will help keep earnings and valuations upbeat in the coming months. 

The two stocks advanced on Friday, with Alphabet surging over 10% after also announcing its first ever dividend. The stock hit a record high as analysts said the firm was the best positioned amid its peers to benefit from an AI boom.

Gains in tech saw the blow past its peers on Friday, closing up 2% at 15,927.90 points. The also rose 1% to 5,099.96 points. But the was far more subdued, up 0.4% at 38,239.66 points.

The earnings season is set to continue this week with more Wall Street majors set to report in the coming days. After a relatively quiet day on Monday, Amazon.com Inc (NASDAQ:), (NYSE:), Advanced Micro Devices Inc (NASDAQ:) and Eli Lilly and Company (NYSE:) will report earnings on Tuesday. 

Fed meeting in focus as rate cut bets wane

Most stock sectors beyond tech saw far more subdued moves on Friday, especially as data- the Fed’s preferred inflation gauge- read hotter than expected for March.

The reading drummed up fears that the Fed had little confidence to begin enacting interest rate cuts, and that the central bank was likely to keep rates higher for longer. 

This put a - due later this week- squarely in focus for more cues from the central bank. The Fed is widely expected to keep rates on hold in May.

Bets are also growing that the Fed will only begin cutting rates by September or the fourth quarter, amid sticky inflation and some resilience in U.S. consumer spending.