After ending last week's trading notably lower, stocks may move back to the upside in early trading on Monday. The major index futures are currently pointing to a sharply higher open for the markets, with the Dow futures up by 111 points.
The upward momentum for U.S. stocks is partly due to strength in the global markets, with Japan's Nikkei 225 Index surging up by nearly 3 percent on the day.
Traders seem to be expressing some optimism about the outcome of the Federal Reserve's two-day monetary policy meeting that ends on Wednesday.
While the Fed is not expected to announce an immediate change in policy, traders will be looking for any signals reading when the central bank will scale back its stimulus program.
Daiwa Capital Markets' Chris Scicluna said, "All eyes will turn to the post-meeting press conference where Bernanke will unveil the Fed's latest economic projections - relevant for the timing of the first rate hike - and hopefully provide greater clarity on the likely timeframe for tapering asset purchases."
Positive sentiment was also generated by the release of the New York Federal Reserve's monthly report on regional manufacturing activity.
The New York Fed said its general business conditions index rose to a positive 7.8 in June from a negative 1.4 in May, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected to climb to a positive 0.5.
Not long after the start of trading, the National Association of Home Builders is scheduled to release a separate report on homebuilder confidence in the month of June. Economists expect the NAHB's housing market index to inch up to 45 from 44 in the previous month.
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