On the economic front, the Institute for Supply Management's (ISM) non-manufacturing index, which tracks monthly changes in the services sector, is due out at 10 a.m. ET. Economists polled by Reuters predict activity fell slightly in February to 55.0 from 55.2. A reading above 50 indicates a sector expansion.
"Businesses remain cautious about the outlook and the effect of higher payroll taxes," wrote Amna Asaf, North America economist at independent research firm Capital Economics, in a note on Thursday afternoon.
European shares were boosted by the news that euro zone finance ministers have struck an agreement to bail out Cyprus by the end of March, although they have yet to work out the details of the 17 billion euro ($22.1 billion) financial aid package.
Shares in mainland China recovered 2 percent on Tuesday after hitting a six-week closing low in the previous session, as outgoing Chinese Premier Wen Jiabao set out a reform plan at the National People's Congress in order to achieve a 2013 growth target of 7.5 percent.
The Senate Budget Committee will meet on Tuesday at 10:30 a.m. New York time to discuss reducing the fiscal deficit by eliminating wasteful spending in the tax code.
House Speaker John Boehner said President Barack Obama and he had made no headway on a deal to avoid sequestration over the weekend. Meanwhile, House Republicans are expected to introduce a bill to extend government funding through September, to avoid a government shutdown at the end of the month.
While stocks so far have largely ignored sequester concerns, analysts say signs the cuts are beginning to impact the economy could eventually move markets.
On Monday afternoon, Stephen King, chief global economist at HSBC, said that the U.S. was living in a fantasy world" over the impact sequestration would have on growth.
"If you look at the projections from the Congressional Budget Office, they assume that growth goes back to between four to five percent in real terms between 2014 and 2018. Their numbers suggest that the U.S. will post the fastest rate of productivity growth of any decade in the last 50 or 60 years," King told CNBC Europe. "Even allowing for the fact that there's some debt reduction, coming through sequestration, there's still a degree of wishful thinking with regard to the economy which probably isn't going to come true."
Qualcomm rose after the chipmaker said it is raising its quarterly dividend by 40 percent to 35 cents a share from 25 cents a share and announced a $5 billion stock buyback program.
Google edged higher after Jefferies boosted its price target on the search-engine giant to $1000 from $875 with a "buy" rating. The company hit an all-time high on Monday.
Netflix gained after RBC initiated coverage of the movie-streaming website with an "outperform" rating and a price target of $210.
JCPenney slumped amid news Vornado Realty Trust is selling 10 million JCPenney shares via Deutsche Bank, sources told CNBC. Vornado currently has an approximately 8.5 percent stake in the retailer, or about 18.6 million shares.
Later, Richmond Federal Reserve President Jeffrey Lacker will take part in a panel discussion, "Help or Harm: Central Bank Monetary Policies at the Outer Limits," at the National Association for Business Economics Conference in Washington D.C. at 2 p.m. On Monday, Fed vice chair Janet Yellen said aggressive monetary stimulus is warranted since the economy continues to operate well below its full potential.
VeriFone is scheduled to report fourth quarter earnings after the closing bell.