Fed speakers and more earnings will take the spotlight Tuesday as Wall Street continues to count down to Friday's employment report.
"I think day-to-day this week it's reaction to data, which I'm not sure is 'good news is good news' or 'bad news is bad news,' and reacting to the drumbeat of earnings," said John Canally, chief economic strategist at LPL Financial.
"Fed speakers this week all have the potential to move markets … because everyone wants to get behind the scenes on the FOMC statement released last week," he said.
Loretta J. Mester, FOMC voting member and Cleveland Fed president, is scheduled to speak at 10:30 a.m. ET Tuesday at the Atlanta Fed Financial Markets Conference on how unusual monetary policy will affect market liquidity.
Atlanta Fed President Dennis Lockhart, a nonvoting member, is due to speak at 7 p.m. Tuesday evening on the economic outlook and monetary policy.
Omar Aguilar, CIO of equities at Charles Schwab Investment Management, said he is listening for "more conviction over what will be their views on guidance for the pace of raising rates."
The Federal Open Market Committee last week kept rates unchanged without ruling out the possibility of a June hike. The statement noted appearances of a slowdown in economic activity while removing a line pointing to risks from global economic and financial developments.
U.S. stocks drifted higher Monday, recovering from their worst week since February, as the U.S. dollar index fell for a sixth straight day and touched its lowest since January 2015. The Dow Jones industrial average added about 117 points to 17,891, while the S&P 500 gained 16 points to 2,081.
The Nasdaq composite rose 42 points to 4,817, despite Apple ending mildly lower for its first eight-day losing streak since July 1998.
The only two times Apple posted a nine-day losing streak was in June 1991 and September 1990, according to Bespoke. But in the month following the eight-day losing streaks in the 1990s, Apple posted a median gain of about 8 percent, Bespoke said.
The Markit/Caixin manufacturing PMI for China is due for release overnight. This weekend, official manufacturing PMI was 50.1 in April, down from 50.2 the prior month, while the services read was 53.5 in April, compared with 53.8 in March.
"Any data on China that points to stability is good," Canally said.
"I think it's slowly dawning on markets that the worst is not going to happen in China," he said.
Other than monthly auto sales, no major U.S. data is expected Tuesday ahead of Friday's key nonfarm payrolls report.
Auto sales for April are expected to show an annualized rate of 17.25 million vehicles, according to analysts polled by Reuters. That would be a slight increase from March's 16.57 million.
Earnings due before the bell Tuesday include Pfizer, Halliburton, HSBC, Archer Daniels Midland, Clorox, Estee Lauder, Hyatt, Mallinckrodt, Sprint, Starwood Hotels, Valero Energy, Vulcan Materials, GrubHub, The New York Times. Firms set to report after the close include Avis Budget, CBS, Illumina, Mylan Labs, Western Union, Etsy, Glu Mobile, Live Nation Entertainment, Match Group, Newfield Exploration, Noodles & Company, Papa John's, Potbelly, Zillow.
Last week, Halliburton rescheduled its earnings report to Tuesday morning as the oilfield services giant said it was working to resolve regulatory concerns over its planned $28 billion merger with Baker Hughes.
On Sunday, the two firms said the deal fell apart after opposition from U.S. and European authorities. Halliburton will pay Baker Hughes a $3.5 billion breakup fee by Wednesday.