Senate leaders are expected to continue negotiations at noon ET Wednesday, after a failed attempt in the House of Representatives to hold a vote on a short-term funding bill.
"Just a day before the Treasury's new borrowing authority is set to expire, and, after yesterday's House effort predictably came to naught, the ball is now back in the court of the Senate to craft a compromise," Chris Scicluna, an economist at Daiwa Capital, said in a morning research note.
Meanwhile, Fitch credit rating agency placed the U.S.' AAA-rating under review for a downgrade on Tuesday, as the impasse over the debt limit and government funding continued.
"With just hours to go until the [debt] deadline, nerves will be playing on traders' minds as they will continue to be on U.S.political headline watch. As a result, trade will be extremely choppy until we get an outcome," said Stan Shamu, market strategist at IG.
The National Association of Home Builders' housing market index for October is due at 10 am ET. And the Federal Reserve's "beige book," a survey of regional economic activity is expected at 2 pm ET.
Among earnings, Bank of America advanced after the financial giant reported earnings that topped expectations and reversed a year-ago loss, as provisions for credit losses declined.
PepsiCo ticked higher after the beverage and snack maker posted higher earnings and said it was on track to meet its financial goals for the year, despite the lackluster economy.
Apple shares may be in focus, after Dow Jones reported that the tech giant was cutting orders for its low-cost iPhone 5C, raising concerns over weak demand. On Tuesday, the iPad maker announced that Burberry CEO Angela Ahrendts will join Apple as senior vice president of retail and online sales next year.
(Read more: Apple cuts 5C orders on weak demand: Report)
Late Tuesday, Twitter chose the New York Stock Exchange for its much-talked-about stock market debut. Tech companies have traditionally gravitated toward Nasdaq, but several glitches, including during Facebook's IPO, have made some rethink.