A political stalemate since its inconclusive elections in late February has spiked concerns over how the country will handle its growing debt problems. Italy paid more to borrow over five years than it has since October at its latest auction, indicating worries over its financial situation.
Stocks ended near their best ever levels on Tuesday, with the Dow posting a new high and S&P 500 finishing less than 2 points from its closing peak.
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Elsewhere in Europe, Cyprus is finalizing financial control measures to prevent a run on its banks, which have been shut for a week since the country agreed to a conditional 10 billion euro ($12.8 billion) bailout from international lenders. Cypriots have been lining up to withdraw cash from ATMs, with limits at 100 euros a day for some banks.
"Banks will open on Thursday ... We will look at the best way to limit the possibility of large sums of money leaving, and not imposing punitive conditions on the economy, businesses and individuals," Cypriot Finance Minister Michael Sarris said in an interview on Cypriot television.
"You can't leave your money in the bank — that's the lesson we're learning now with Cyprus. Why leave your money in an interest-bearing bank account when you never know, the bank could fail. Why not buy something that central banks can't print?" said Peter Schiff of Euro Pacific Capital.
Trading is likely to be thin ahead of the three-day Easter weekend. U.S. markets will be closed Friday for Good Friday.
On the economic front, the National Association of Realtors is expected to report its monthly pending home sales at 10 am ET. Economists polled by Reuters expect a 0.9 percent decline in February, compared with a 4.5 percent rise in the prior month.
Weekly mortgage applications rebounded last week as interest rates pulled back for the first time in three weeks, according to the Mortgage Bankers Association.
Meanwhile, crude oil inventories for last week will be released by the Energy Department at 10:30 am ET. Inventories rose by 1.31 million in the prior week.
Paychex and Red Hat are among notable companies scheduled to report earnings after the closing bell.
The Treasury is slated to auction $35 billion in 5-year notes with the results available shortly after 1pm ET.
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