Stock futures held steady in overnight trading on Tuesday after a rally on Wall Street as investors bought the dip after a five-day sell-off in the S&P 500.
Futures on the Dow Jones Industrial Average were little changed. S&P 500 futures and Nasdaq 100 futures also remained unchanged.
The overnight session followed a market rebound, with the tech-heavy Nasdaq Composite gaining more than 1% for a second straight day. The S&P 500 rose 0.9% Tuesday and fell five days while the blue-chip Dow added 180 points.
"Concerns over the Fed's recent tightening bias and the prospect of higher interest rates seem to have eased (for now, at least), with investors looking for opportunities in pockets that have seen the sharpest cuts in recent weeks," said Chris Hussey, a said the executive director of Goldman Sachs in a statement.
Technology stocks have seen a sharp sell-off in the New Year after the Federal Reserve announced a faster-than-expected tightening plan. Many are betting that the market could see its first rate hike as early as March.
Bond yields, which skyrocketed in early 2022, stabilized on Tuesday, with ten-year government bond yields falling to 1.76% after hitting 1.8% earlier in the week.
Investors wait for Wednesday's key inflation data to assess the economic picture and the Fed's next move.
CNBC Pro Stock Pick and Investment Trends:
An important measure of consumer prices is likely to show that consumer inflation skyrocketed in December, the sharpest jump since the early 1980s. According to the Dow Jones, economists expect the consumer price index to rise 0.4% in December and 7% year-on-year.
"I'm not sure if tomorrow's inflation data will reassure investors as the CPI hit a high of over 7% for more than a decade," said Craig Erlam, senior market analyst at Oanda. "A higher value could spook investors again as equity markets appear to stabilize."
Fed chairman Jerome Powell said Tuesday that the economy is both healthy enough and in need of tighter monetary policy, which is likely to result in rate hikes, curbs in asset purchases and a smaller balance sheet.
Meanwhile, the big banks start the reporting season for the fourth quarter on Friday. JPMorgan Chase, Citigroup and Wells Fargo are expected to release quarterly results before the bell.