(Reuters) - Futures tracking the S&P 500 pared gains on Tuesday, as a hotter-than-anticipated inflation reading dampened hopes of the Federal Reserve cutting borrowing costs in the next few months.

A Labor Department report showed the Consumer Price Index (CPI) rose 0.4% on a monthly basis in February, in line with the 0.4% increase expected by economists polled by Reuters. Annually, it increased 3.2%, versus a 3.1% estimated growth.

Excluding volatile food and energy components, the core figure rose 0.4% month-on-month in February, compared with an estimated 0.3% rise. Annually, it gained 3.8% versus the estimated 3.7% increase.

At 8:32 a.m. ET, Dow e-minis were down 58 points, or 0.15%, S&P 500 e-minis were up 6.75 points, or 0.13%, and Nasdaq 100 e-minis were up 54.5 points, or 0.3%.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)