Bank earnings, retail sales take center stage on Wall Street

U.S. stock index futures indicated a flat to slightly lower open on Tuesday, as traders eyed major bank earnings and retail sale data.

Futures initially edged lower after moderate data. Retail sales showed an increase of 0.9 percent, slightly below expectations of a 1.1 percent month-on-month increase in overall spending. However, the figure was the first gain since late last year.

The Producer Price Index (PPI) showed an increase of 0.2 percent in March, in line with expectations and breaking four consecutive months of declines.

Following the data reports, the U.S. 10-year Treasury yield fell to 1.87 percent. The 2-year Treasury yield fell as low as 0.50 percent.

"I think across the board it's a little bit disappointing. People have been jumping all over March as spring rebound month. I think it's a little too early," said Bob Sinche, global strategist at Amherst Pierpont. "I think the bond market had come in a little bit short, expecting a good retail number."

"I don't think it's the end of the dollar rally. I think it was a bit overdone. $1.05 is a very difficult area for the euro to break through. it's got to be a dollar trade," he said, adding it needs stronger us data to drive it.

The U.S. dollar edged lower after the data releases, with the euro near $1.06.

Financials kicked off the earnings season, with JPMorgan Chase and Wells Fargo reporting before market open. Johnson & Johnson also posted results before the bell. Intel and CSX are both due after the bell.

JPMorgan's net income rose to $5.91 billion, or $1.45 per share, in the first quarter ended March 31, from $5.27 billion, or $1.28 per share, a year earlier, according to Reuters. CEO Jamie Dimon said the company is getting safer and stronger, as well as gaining market share.

Read MoreMarkets look to bank earnings, retail data

A JPMorgan Chase flag at the company's headquarters in New York.
Ron Antonelli | Bloomberg | Getty Images
A JPMorgan Chase flag at the company's headquarters in New York.

Wells Fargo posted earnings of $1.04 per share, six cents above estimates, with revenue also above forecasts. The report did break an 18-quarter streak of higher year-over-year earnings, as the bank deals with the impact of a lower interest rate environment.

Johnson & Johnson beat on both the top and bottom lines but reported an 8.6 percent decline in quarterly profit as the impact of a strong dollar on overseas revenue offset growing sales of its mainstay older drugs.

The strong greenback will remain in focus after the dollar index against a basket of currencies rose close to 100 on Monday.

While overall S&P 500 earnings are expected to be down by 2.9 percent, the profits of financial companies are expected to be 10.8 percent higher, according to Thomson Reuters.

Retail sale reverse?

Business inventories are due at 10:00 a.m. ET.

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New York Federal Reserve President William Dudley will speak at 8:40 a.m. and Minneapolis Fed President Narayana Kocherlakota will speak at 8 p.m.

Meanwhile in Europe, shares were lower in morning trade Tuesday, amid investor caution over a European Central Bank (ECB) meeting this week and the official start of the first-quarter earnings season.

In other corporate news, Finland's Nokia confirmed Tuesday that it is in "advanced" merger discussions with telecoms company Alcatel-Lucent, following rumors of a tie-up.

IBM is creating a new "Watson Health" unit, in an extension of its data analytics partnership with Apple. The new unit will provide data analytics to health care companies, using information gathered by Apple devices.

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Norfolk Southern said it expected to earn $1 per share for the first quarter, below current consensus estimates of $1.25. The rail operator said slower coal volumes and a reduction in fuel surcharge revenue are among the factors weighing on the bottom line. The warning is also impacting other rail stocks, like Union Pacific.

CNBC and Reuters contributed to this report.