July 14 (Reuters) - S&P 500 futures turned positive on Tuesday, as a softer-than-expected inflation reading fueled bets on a less hawkish Federal Reserve.

A Labor Department report showed the Consumer Price Index rose 3.5% on a yearly basis, less than estimate of a 3.8% increase, according to economists polled by Reuters. On a monthly basis, it fell 0.4% versus an expected 0.1% decrease.

Excluding volatile food and energy components, core CPI stood at 2.6% on an annual basis, less than estimates of a 2.8% increase. Core CPI stood unchanged on a month-on-month basis, versus a 0.2% expected rise.

At 8:33 a.m. ET, Dow E-minis YMcv1 were down 6 points, or 0.01%, S&P 500 E-minis EScv1 were up 35.5 points, or 0.48%and Nasdaq 100 E-minis NQcv1 were up 407.5 points, or 1.38%.