U.S. stock futures are flat with the S&P 500 at a record high

U.S. stock futures were steady in overnight trading on Sunday as investors digested the S&P 500's record level heading into a week with a key Federal Reserve meeting.

Dow futures rose 23 points. S&P 500 futures rose 0.09% and Nasdaq 100 futures added 0.14%.

The Fed's two-day policy meeting will likely dominate investor behavior this week. Although the central bank is not expected to take any action, its forecasts for interest rates, inflation and the economy could move the markets.

Fed Chairman Jerome Powell speaks to the press after the central bank issues its statement at 2 p.m. ET on Wednesday. He is expected to affirm the Fed's commitment to easy policy. However, concerns over inflation and how the Fed could react is likely to influence market direction, especially after a hotter-than-expected consumer inflation reading for May was reported last Thursday.

"Considering the recent outsized inflation reports, the Federal Reserve's meeting this week will be scrutinized for any telltale sign the Fed's timetable for either raising the Funds Rate or tapering QE is being moved forward," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.

"Any evidence suggesting monetary tightening is being moved forward will likely bring volatility to the stock market," added Paulsen.

U.S. stocks ended last week with a record closing high for the S&P 500 and the beginning of a rotation back into growth names.

Last week, the 30-stock Dow Jones Industrial Average fell 0.8%, but the S&P 500 rose 0.4%, for its third straight positive week. The Nasdaq Composite was the outperformer with a gain of nearly 1.9%, posting its fourth winning week in a row as the tech trade came back into favor.

"Because the S&P 500 Index reached yet another new record high last week, investors will be watching to see if this signals even higher levels near term," said Paulsen.

Investors are giving growth stocks another chance as bond yields come down. The 10-year Treasury went below 1.43% on Friday, a three-month low. Cathie Wood's Ark Innovation, an ETF that focuses on disruptive technology, returned about 6% last week.

Boosting cryptocurrency sentiment, Tesla CEO Elon Musk on Sunday said the company will resume bitcoin transactions once it confirms there is reasonable clean energy usage by miners. Bitcoin last traded up 8.6% around $39,000, according to Coin Metrics.

Meme stocks also garnered attention last week. AMC Entertainment, Clover Health Investments, GameStop and more experienced volatile trading as the group continued to get attention from the social media investors on Reddit.

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— with reporting from CNBC's Patti Domm.

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