Wall Street under pressure as Fed meeting nears

U.S. stock index futures indicated a lower open on Tuesday, as investors digested weak housing data and awaited news from the U.S. Federal Reserve's two-day meeting.

The market expects the central bank to drop the word "patience" from its statement, out on Wednesday, in a sign that it could start raising interest rates as early as June. The Fed will also release updated economic forecasts and Fed Chair Janet Yellen will hold a briefing.

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Janet Yellen, Chair of the Federal Reserve.
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Janet Yellen, Chair of the Federal Reserve.

Housing starts fell 17 percent in February. Company earnings scheduled for Tuesday include FactSet before market open, with Oracle and Adobe Systems due after the closing bell.

Crude continued to trade near 6-year lows, dipping below $43 a barrel. Brent fell below $54 a barrel on Tuesday, reversing earlier gains due to concerns over a growing supply glut and the weight of the strong U.S. dollar.

Across the Atlantic, European equities were mixed in the morning session on Tuesday, as investors looked ahead to the Fed meeting. Greece is set to top the agenda at the European Union summit scheduled for later this week, with a funding deal likely dependent on whether the socialist Greek government commits to reforms.

It is election day in Israel on Tuesday and polls suggest the race between incumbent Prime Minister Benjamin Netanyahu and Isaac Herzog, the co-head of the Zionist Union coalition, is too close to call. The results could have a knock-on effect on the future of peace talks between Israel and Palestine.

DSW beat estimates by 7 cents with adjusted quarterly profit of 35 cents per share, with sales easily beating estimates. DSW saw comparable store sales rise 7.6 percent, and it also raised its quarterly dividend to 20 cents per share from 18¾ cents per share.

Burlington Stores reported adjusted quarterly profit of $1.43 per share, 11 cents above estimates, with revenue also exceeding forecasts. Burlington saw comparable store sales rise 6.7 percent from a year earlier.

Alibaba was upgraded by Stifel Nicolaus to "buy" from "hold" and added to the Stifel "Select List." Stifel cites long-term benefits from improvements to the online retailer's platform, and notes its multiples compare favorably to those of competitor Amazon.com.

EBay has launched a live auction platform for Sotheby's, with the first sale scheduled for April 1.

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American Airlines was named to replace Allergan in the S&P 500 after the close of trading on March 20. Allergan is in the process of being purchased by Actavis.

CNBC's Peter Schacknow contributed to this report.