US Markets

Fed, Greece to dominate Wall Street trade

U.S. stock futures pointed to a lower open on Wall Street on Tuesday, with Greece jitters expected to weigh on sentiment as the Federal Reserve kicks off its two-day meeting.

The U.S. central bank is not expected to announce any changes to its monetary policy this week, but talk that the Fed could lift interest rates in September for the first time since 2006 is growing amid improving economic conditions. And that means the Fed's post-meeting statement on Wednesday is likely to be scrutinized closely.

Read More Greece weighs while traders await Fed

A trader works on the floor of the New York Stock Exchange.
Getty Images

Greece is also expected to remain in the spotlight on Tuesday, with the country's Prime Minister Alexis Tsipras on Monday blaming creditors for the collapse of talks on unlocking aid for reforms at the weekend.

Tsipras told lawmakers of his Syriza party that the lenders want to humiliate the Greek government and the creditors' obsession for a program of cuts cannot be a mistake—it has political ends, Reuters reported. The prime minister also said they will continue to work for a solution but their public mandate is to end austerity, while Greek officials want a deal that ends talk of "Grexit" once and for all.

The impasse has raised concerns that Athens is heading for a debt default that could end with it leaving the euro zone.

A spokesman said Athens has submitted proposals and is waiting for a response from lenders, Reuters said.

The Greek jitters continued to undermine global markets, with Asian shares closing broadly in the red. European stocks recovered to trade flat as investors found buying opportunities, analysts told Reuters.

Euro zone finance ministers are next due to discuss the Greek crisis on Thursday—when Tsipras has a planned visit to Russia.

Read More Greece defiant, accused of 'breaking all the rules'

"With reports already circulating of plans by EU creditors to impose capital controls in the event Greece rejects a take it or leave it deal set to be put forward on Thursday, it would appear that the clock is ticking ever so closer to midnight," Michael Hewson, chief market analyst at CMC Markets, said in a note.

"Or to take the analogy that little bit further we are now at DEFCON 1 with respect to the seriousness of the current situation, and a potential default."

What matters more: Fed or Europe?

U.S. stock market futures held lower, with Dow Jones Industrial Average futures trading about 40 points lower.

Wall Street shares closed lower on Monday as concerns about Greece's future took a toll ahead of the highly-anticipated Fed meeting.

May housing starts showed a 11.1 percent decline, missing expectations, while building permits increased 11.8 percent month-over-month.

The data follow Monday's National Association of Home Builders sentiment survey, which showed confidence rising to its highest level in nine months.

Earnings due this session include FactSet Research, Adobe Systems, Bob Evans Farms and La-Z-Boy.

Read More Early movers: RAI, GLW, TWTR, MNST, GPS, UA & more