US pre-open: Futures higher as banks remain in focus
Wall Street futures were in the green ahead of the bell on Tuesday amid hopes that recent chaos in the banking sector may be stifled.
As of 1230 GMT, Dow Jones futures were up 0.88%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.83% and 0.63% firmer, respectively.
The Dow closed 382.60 points higher on Monday, reversing losses recorded in the previous session.
Regional banks traded higher in pre-market trading after Treasury Secretary Janet Yellen stated that the government was ready to provide further deposit guarantees to stem liquidity problems if the state of the current banking crisis worsens.
"The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader US banking system," said Yellen. "And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."
Traders now expect the Federal Reserve, which wraps up its two-day policy meeting on Wednesday, to slow its recent pace of tightening as a result of the unrest in the banking sector, with market participants pricing in a 0.25% rate hike.
AJ Bell's Russ Mould said: "The clouds are parting and glimpses of blue sky are giving hope to investors after a chaotic few weeks. With no new troubles in the banking sector for the past 24 hours, markets are hoping that’s a sign the crisis could have peaked
"The key question is whether this is the calm before the storm. The Federal Reserve’s next interest rate decision tomorrow still has the potential to kick up a fuss if the market thinks it is being too aggressive with rate rises. Investors' nerves are already frail, and it wouldn't take much to disturb the peace on the markets seen today."
On the macro front, existing home sales data will be published at 1400 GMT.
Reporting by Iain Gilbert at Sharecast.com