Wall Street futures rose more than 1% on Tuesday as a pullback in U.S. Treasury yields boosted the demand for stocks, with investors waiting for more economic data to gauge the monetary tightening path.
Data on job openings and factory orders will be in focus after the market opens, a day after weaker-than-expected manufacturing activity showed rising rates taming demand for goods.
Yields on government bonds fell on expectations that the Federal Reserve might slowdown, but Bank of New York President John Williams said while there are nascent signs of cooling inflation, price pressures remain too high, implying the U.S. central bank must press forward.
Investors will continue to keep a close watch on commentaries from Fed speakers including New York President John Williams, Cleveland President Loretta Mester and Governor Philip Jefferson.
"With earnings starting next week, it's going to be quite interesting to see how much the inflation is really impacting profits," said Melissa Brown, global head of applied research at Deutsche Boerse-owned Qontigo .
"If profits don't come out maybe as high as expected and you combine that with continuing higher interest rates and therefore, lower justifiable valuations, that's not a good mix to have for a market recovery."
The rebound in stocks on the first trading day of the final quarter follows the S&P 500's (.SPX) lowest close in nearly two years on Friday that capped its worst monthly performance since March 2020.
At 06:26 a.m. ET, Dow e-minis were up 445 points, or 1.51%, S&P 500 e-minis were up 65.75 points, or 1.78%, and Nasdaq 100 e-minis were up 248.25 points, or 2.2%.
Yield on the 10-year U.S. Treasury slipped to near two-week lows, lifting rate-sensitive growth stocks.
Megacap stocks such as Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O) and Nvidia Corp (NVDA.O) rose between 2.0% and 3.1%.
Rivian Automotive Inc (RIVN.O) jumped 8.8% after the electric-vehicle maker said it produced 7,363 units in the third quarter, 67% higher than the preceding quarter, and maintained its full-year target of 25,000.
