By Shristi Achar A and Johann M Cherian

Dec 12 (Reuters) – Wall Street’s main indexes were set for a dull start on Tuesday as the latest inflation reading turned investors cautious ahead of the Federal Reserve’s policy meeting, even as it raised expectations that interest rates have peaked.

Consumer Price Index (CPI) rose 3.1% on an annual basis in line with estimates from economists polled by Reuters. Core prices, excluding volatile items like food and energy costs, also matched expectations, rising 4% annually.

On a month-on-month basis, consumer prices rose 0.1% last month, compared with estimates of it remaining unchanged.

“This report was pretty close to being in line. It doesn’t really change the narrative that the Fed is probably going to share about how progress has been made on taming the monster of inflation. But there’s still work to be done,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Money markets have almost fully priced in a rate-hike pause at the end of the Fed meeting, with traders seeing a 54% chance of at least a 25-basis-point cut in March 2024, as per CME Group’s FedWatch tool.

The two-day Fed’s monetary policy meeting will begin later in the day.

Expectations that the U.S. central bank would start easing them from next year have lifted the three main stock indexes to their highest close for the year on Monday.

The European Central Bank and the Bank of England are also scheduled to deliver their policy verdicts later this week.

Google-parent Alphabet GOOGL.O underperformed its megacap peers, down 1% in premarket trading, after “Fortnite” maker Epic Games prevailed in its high-profile antitrust trial over the company.

At 9:02 a.m. ET, Dow e-minis 1YMcv1 were up 27 points, or 0.07%, S&P 500 e-minis EScv1 were down 2.75 points, or 0.06%, and Nasdaq 100 e-minis NQcv1 were up 9 points, or 0.06%.

Among other movers, OracleORCL.N fell 9.4% as the cloud services provider forecast third-quarter revenue below estimates on slowing demand for its cloud service.

LucidLCID.O was down 3% after the electric-vehicle maker’s CFO Sherry House stepped down.

Airbnb ABNB.O fell 2.3% after Barclays downgraded the rental firm to “underweight” from “equal weight”.

(Reporting by Shristi Achar A and Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)

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Original: GOOGL Feed: US STOCKS-Wall St set for dull start after tame inflation data