Credit: Shutterstock photoForexpros - U.S. stock futures pointed to a higher open on Tuesday, one day after the Dow Jones Industrial Average suffered its sixth-biggest drop on record, as investors awaited a Federal Reserve statement on monetary policy, which could provide hints regarding further easing.
Ahead of the open, the Dow Jones Industrial Average futures pointed to a gain of 1%, the S&P 500 futures jumped 1.2%, while the Nasdaq 100 futures climbed 0.75%.
Stock index futures pared gains after government data showed that non-farm productivity declined 0.3% in the second quarter, while unit labor costs rose 2.2%, broadly in line with expectations.
With financial markets in turmoil, expectations grew that the Fed would introduce further easing to calm investors and stimulate growth in the world's largest economy after it completed a USD600 billion Treasury bond-buying program known as Quantitative Easing 2 on June 30.
Shares in the beaten-up financial sector posted sharp gains in pre-market trade. Bank of America, which saw shares plummet 20% in the previous session, climbed 5.8%, Citigroup advanced 4.1%, while JP Morgan was up 2.8%.
In earnings news, Dish Network shares could be active after the satellite television provider reported a 30% increase in second quarter profit. Revenue for the quarter rose 13% to USD3.59 billion, above expectations for revenue of USD3.38 billion.
AOL said that its second quarter loss narrowed to USD11.8 million, compared to a massive loss of USD1.06 billion a year earlier.
Other notable earnings scheduled for Tuesday include, Walt Disney Company and Sempra Energy.
Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 shed 0.9%, France's CAC 40 advanced 0.6%, Germany's DAX sank 1.5%, while Britain's FTSE 100 added 0.25%.
European equities came off their earlier lows, after the DAX index dropped as much as 6% after the open, while the CAC index retreated nearly 3.4% earlier.
During the Asian trading session, Hong Kong's Hang Seng Index plunged 5.5%, while Japan's Nikkei 225 Index slumped 1.7%, as market sentiment was rattled following a massive overnight sell-off on Wall Street, while stronger-than-expected Chinese inflation data added to fears over the global economic outlook.
A report from China's National Bureau of Statistics showed that consumer price inflation rose by a seasonally adjusted 6.5% in July, the fastest pace in three years.
Later in the day, the Federal Reserve was to announce the federal funds rate. The announcement will be followed by the bank's rate statement, which could provide hints regarding further monetary easing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
