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Street eyes data clues ahead of Fed

U.S. stocks were expected to open higher on Tuesday amid data that could shed light on the closely-anticipated U.S. Federal Reserve meeting this week.

August industrial production data showed a decline of 0.4 percent, worse than the expected 0.2 percent drop.

August retail sales showed an increase of 0.2 percent, missing expectations of a 0.3 percent gain. Ex-autos, retail sales increased 0.1 percent. July retail sales were revised up to 0.7 percent from 0.6 percent.

The September U.S. Empire Manufacturing showed negative 14.7, versus August's read of negative 14.9.

Stock index futures held higher, with the Dow futures up about 40 points, after initially fluctuating between slight gains and losses following the data releases.

Treasury yields ticked slightly higher, with the 10-year yield at 2.21 percent and the 2-year yield at 0.75 percent. The dollar turned positive against major world currencies, with the euro dipping below $1.13 and the yen near 120 yen against the greenback.

Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

While the data could give markets some direction, major market moves were not expected ahead of the Fed's two-day meeting that kicks off Wednesday.

This week's Fed meeting is one of most closely anticipated for some time. While many economists have tilted towards expecting the first Fed rate hike in almost a decade as conditions in the labor market improve, financial markets price in only a small chance of a move.

Read MoreLast look at consumer before Fed meets

Recent market volatility and concerns about the impact of weakness in China's economy – the second biggest in the world – have tempered market expectations for a near-term rate rise.

In Asia, the Bank of Japan held monetary policy steady at the end of a two-day policy and said that slowing demand from emerging markets was hurting Japanese exports. Chinese stocks meanwhile fell more than two percent as concerns about China's economic outlook continued to take a toll.

European stock markets traded mixed, while oil prices recovered some of the previous session's sharp falls. U.S. oil prices were last trading about $44.30 a barrel, 0.66 percent higher on the day.

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