US stocks seen higher ahead of Fed policy meeting

U.S. stock index futures held their gains Tuesday following the latest S&P/Case-Shiller housing report and ahead of the Federal Reserve's meeting.

On the economic front, single-family home prices rose 1 percent in May on a seasonally adjusted basis, according to the S&P/Case-Shiller composite index of 20 metropolitan areas. Economists polled by Reters expected a gain of 1.5 percent.

The Conference Board is scheduled to release its monthly consumer confidence index at 10 am ET.

Among earnings, Merck topped profit expectations but showed weakness on revenue, sending shares lower pre-market.

Pfizer gained after the U.S.'s largest drugmaker posted numbers that were slightly ahead of expectations.

And BP posted a second-quarter profit that missed analysts' expectations, and warned that its $20 billion oil-spill compensation fund has almost run out. After the numbers were out, CEO Bob Dudley told CNBC that class action lawsuits like the ones BP is facing in the U.S. are a "business model" that serve only to benefit attorneys.

With quarterly results in from more than half of the S&P 500 companies, 67 percent have beaten earnings expectations—in line with the average beat over the last four quarters. Meanwhile, about 56 percent of the companies have beaten revenue expectations, more than the 48 percent of revenue beats in the past four earnings seasons, according to the latest data from Thomson Reuters.

Amgen, Aflac, Symantec and Take Two Interactive are among notable companies scheduled to report after the closing bell.

But trading volume is likely to be muted again as investors look ahead to the statement from Federal Reserve's policy-setting meeting. In addition, the first reading of second-quarter gross domestic product will be due Wednesday. And the closely-watched July employment report will be reported Friday.

The Fed is expected to maintain its accommodative monetary policy, but investors will be looking for hints on when the central bank might start scaling back on its monthly bond-buying program. In addition, markets will also be eager for hints for who may replace Ben Bernanke next year as Fed Chairman.

(Read more: Fed expectations: will they stay or will they slow?)

"It's a pivotal time for Fed policy, and it would be advantageous to have someone at the helm who had already gone through the analytical process of getting comfortable with the last five years of policy, rather than coming in with a completely clean slate and trying to potentially reinvent it," said Ian Lyngen, senior Treasury strategist at CRT Capital.

(Read more: Fed intrigue, not policy, has market attention)

The Japanese yen weakened against the dollar to above the 98-level in early trade, leading the export-heavy Nikkei index to rally 1.5 percent. Meanwhile, South Korea's Kospi added 0.9 percent and the Shanghai Composite traded within sight of the 2,000 mark.

European shares rose after an upbeat German consumer confidence report. The Gfk research institute said its forward-looking consumer index hit its highest level since September 2007, thanks to an improving labor market and expectations for more robust economic growth.

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

On Tap This Week:

TUESDAY: Consumer confidence, FOMC mtg begins, Google Nexus 7 on sales; Earnings from Amgen, Aflac, Symantec, Take Two Interactive
WEDNESDAY: MBA mortgage applications, ADP employment report, GDP, employment cost index, Chicago PMI, oil inventories, FOMC mtg announcement, farm prices, Booz Allen Hamilton investor call, Electronic Arts shareholder mtg; Earnings from Comcast, Honda, MasterCard, Hess, Humana, Sodastream, Allstate, CBS, Marriott, MetLife, Whole Foods, Dreamworks Animation, Yelp
THURSDAY: Challenger job-cut report, jobless claims, PMI manufacturing index, ISM mfg index, construction spending, natural gas inventories, Fed balance sheet/money supply, auto sales, JCPenney vs. Martha Stewart closing arguments, Michael Kors shareholder mtg, Motorola Moto X launch; Earnings from AstraZeneca, ConocoPhillips, ExxonMobil, P&G, Royal Dutch Shell, Barrick Gold, Cigna, Clorox, Time Warner Cable, AIG, Kraft Foods, LinkedIn, Leap Wireless
FRIDAY: Nonfarm payrolls, personal icome & outlays, factory orders, Congress breaks for summer, Dell shareholders mtg, Detroit bankruptcy hearing; Earnings from Chevron, Toyota, Viacom

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