Wall Street eyes sharply higher open on Greece hopes

U.S. stock index futures pointed to a sharply higher open on Wednesday, after a deal between Greece and its international creditors looked possible.

Dow Jones futures shot more than 160 points higher after a letter written by the Greek prime minister, first published by the Financial Times newspaper, suggested that Greece would finally accept all the demands that were put forward by its creditors over the weekend.

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Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

Prime Minister Alexis Tsipras accepted lenders' conditions in a two-page letter originally sent to the heads of the European Commission, requesting only minor tweaks to their suggestions on pensions and tax reforms. This came after months of wrangling that culminated on Monday with Greece defaulting on a 1.5 billion-euro repayment to the International Monetary Fund.

Aside from Greek developments, investors in the U.S. are fixed on reports on the labor market.

The ADP private sector employment report showed creation of 237,000 jobs, topping expectations of 218,000.

Treasury yields held higher, with the 10-year yield at 2.43 percent. The 2-year note yield was 0.68 percent. German 10-year bund yields gained to 0.83 percent.

The U.S. dollar advanced against major world currencies, with the euro at $1.108. The yen weakened against the dollar at 123.12 yen.

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Wednesday kicks off two days of important economic data that culminate with the most important report of all: the official non-farm payrolls report for June on Thursday—out early because of the Independence Day holiday. Economists expect a total of 230,000 nonfarm payrolls in the government's report on Thursday.

Traders had been eyeing this week's data, especially jobs, to get more clues on the state of the economy and therefore the Fed's potential timing for a rate hike.

Other data expected on Wednesday includes construction spending and the ISM manufacturing index, both due at 10 a.m. ET. Vehicle sales data will also be released at 5 p.m.

Weekly mortgage applications fell 4.7 percent on the highest rates in 9 months.

Major earnings out on Wednesday included Constellation Brands, General Mills and McCormick before market open. Progress Software is due after the bell.

General Mills reported earnings that beat expectations but missed on revenue, due in part to a stronger dollar. The cereal maker did see growth in both prices and profit margins.

McCormick topped estimates for earnings per share and missed slightly on revenue as the stronger dollar weighed. The spice maker also raised its full year forecast due to a reduction in its expected tax rate.

Constellation Brands posted earnings that beat on both the top and bottom line. The spirits maker also raised its full-year forecast, based on upbeat results for its beer business.

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Meanwhile in Europe, equities jumped on Wednesday, buoyed by new hopes that a deal could be found between Greece and lenders.

The pan-European Stoxx 600 index was trading nearly 2 percent higher after the FT report.

CNBC's Peter Schacknow contributed to this report