US pre-open: Stocks to rebound as investors eye more bank earnings

US stocks looked set for a firmer open on Wednesday, rebounding from losses in the previous session as investors eyed earnings from the likes of Bank of America and Goldman Sachs and a series of speeches by Federal Reserve officials.

At 1125 GMT, Dow Jones Industrial futures were up 0.5% after the Dow failed to close above 26,000 on Tuesday amid worries about a government shutdown, having breached that level for the first time at the open. S&P 500 and Nasdaq futures were 0.3% and 0.4% higher, respectively.

Oanda analyst Craig Erlam said: "US investors were left feeling a little anxious on Tuesday after indices wiped out the strong gains seen at the open to end the day a little lower, but these worries may be quickly alleviated with futures pointing to another positive open on Wednesday.

"There were some concerns on Tuesday that the prospect of a government shutdown may rattle the markets, with Congress appearing no closer to finding a solution, but I’m not convinced that investors are overly worried at this moment in time. In the past, the can has either been kicked down the road late in the day or shortly after the shutdown begins and right now I don’t see any reason to believe this will be any different.

"I think investors are far more concerned with earnings season, both in terms of whether companies lived up to high expectations going into the season and the projected benefits of Donald Trump’s tax reforms. It’s this that will determine whether stock markets can continue the remarkable run they’ve been on, more so than how long it takes government to reach a budget agreement or pass a temporary spending bill."

Chicago Fed President Charles Evans and Dallas Fed President Rob Kaplan are due to take part in a discussion at an event in Florida at 2015 GMT, while Cleveland Fed President Loretta Mester will make a speech at New Jersey's Rutgers University at 2130 GMT.

On the corporate front, all eyes will be on earnings from banking heavyweights Bank of America and Goldman Sachs before the opening bell, particularly after Citigroup's numbers on Tuesday. Charles Schwab is also slated to report before the open and aluminium producer Alcoa will release its earnings after the close.

Elsewhere, railroad operator CSX was likely to trade higher after its quarterly earnings late on Tuesday beat expectations.

On the data front, industrial production figures for December are at 1415 GMT, while the NAHB housing market index for January is at 1500 GMT.