U.S. stock futures traded near the flatline Tuesday night after the S&P 500 closed above 5,500 for the first time.

Futures tied to the S&P 500 inched down 0.1%. Dow Jones Industrial Average futures and Nasdaq 100 futures were marginally lower.

Paramount Global shares popped nearly 7% in extended trading following reports from The Wall Street Journal and The New York Times that Skydance Media has reached a preliminary agreement to buy National Amusements, the entertainment giant's controlling shareholder.

During Tuesday's main trading session, the broad market index rose 0.62% to close above 5,500 for the first time. The Nasdaq Composite advanced 0.84% to close at a record, and the 30-stock Dow rose 0.41%.

As the S&P 500 continues to climb, concern is growing across Wall Street that the narrow leadership of the rally is not sustainable for much longer. The question of when the Federal Reserve will start cutting rates is also weighing upon investors. Speaking at a central bank forum on Tuesday, Fed Chair Jerome Powell said that while the central bank has made some progress in reducing inflation, it is not quite ready to lower rates. 

Scott Chronert, Citi Research head of U.S. equity strategy, thinks a pullback may be imminent in the coming months. 

"Our concern is that the market is beginning to price in a growth expectation that may be difficult for companies, one by one, to meet, particularly given the ongoing strain that we're seeing on underlying economic conditions," he said on CNBC's "Closing Bell" on Tuesday. 

"Combine that with strong flows into the mega cap growth tech and core arena and a euphoric sentiment read — all suggest to us that we do have to be prepared for a pullback at some point as the summer unfolds," Chronert added. 

Several new economic data points are scheduled for release on Wednesday ahead of the Fourth of July holiday. ADP's private payrolls data for June is due, as are weekly jobless claims figures. The U.S. trade deficit balance for May, while the S&P Global U.S. Services Purchasing Managers Index and the ISM Non-Manufacturing PMI readings for June are due. 

Minutes from the policy-setting Federal Open Market Committee's June meeting will be released in the afternoon. 

The New York Stock Exchange closes early at 1 p.m. ET on Wednesday and will be shut on Thursday for Independence Day.

Consumer discretionary sector closes at highest level since 2022

The consumer discretionary sector popped 1.8% to close at its highest level since January 2022.

A 10.2% jump in Tesla shares helped lift the sector. The electric vehicle maker surged as its second-quarter vehicle production and delivery reports surpassed analysts' expectations.

E-commerce giant Amazon also contributed to the sector's gains, rising 1.4% and hitting a new all-time high.

Consumer discretionary was the outperformer of the 11 sectors in the S&P 500 on Tuesday, boosting the broad market index to closing record of 5,509.01 and its first close above the 5,500 threshold.

—Darla Mercado, Chris Hayes

Paramount rallies 9% on news of reignited Skydance Media merger talks

Paramount Global shares surged 9% Tuesday night after The Wall Street Journal and The New York Times that Skydance Media has come to a preliminary agreement to buy National Amusements, the controlling shareholder of Paramount, and merge with the entertainment giant.

The news comes after National Amusements and Skydance called off talks for a deal in June.

Paramount declined to comment to CNBC on the news. National Amusements and Skydance did not immediately return a request for comment.

— Hakyung Kim, Rohan Goswami

Equity risks are due to rise in the latter half of the year, Goldman Sachs says

The first half of this year has been characterized by a technology-led rally within the equity markets. But as the latter half of the year kicks off, Goldman Sachs foresees the tides turning for investors.

"As we enter the second half of the year, the risks for equity holders are rising," wrote strategist Peter Oppenheimer. He also pointed to an uncertain backdrop that includes lofty valuations and increasing political risk.

However, Oppenheimer reassured investors by pointing to historical records indicating that a solid second half of the year usually follows a strong first half.

"Nonetheless, it should be stressed that it is unusual for 2H returns to be weak following 1H returns as strong as we have seen this year," he wrote.

— Lisa Kailai Han

Stock futures are flat Tuesday night

U.S. stock futures traded near the flatline Tuesday night.

Futures tied to the S&P 500 pulled back 0.1%. Dow Jones Industrial Average futures inched down 28 points, or 0.1%, and Nasdaq 100 futures also slipped 0.1%.

— Hakyung Kim