Stock futures pointed to a higher open and the dollar firmed after a Federal Reserve official said a March interest rate hike was still possible.
Philadelphia Fed President Patrick Harker said the Fed, in his view, could raise rates in March. Treasury yields were slightly higher and futures priced March rate hike odds at about 25 percent.
On the data front Tuesday, there is international trade, expected to show a narrowing of the trade deficit to $44.8 billion from $45.2 billion when it is reported at 8:30 a.m. ET. There is also Jolts data on job openings and turnover at 10 a.m. and consumer credit at 3 p.m. The Treasury auctions three-year notes at 1 p.m.
A bunch of companies report ahead of the open, and Michael Kors was sharply lower after its report.
Treasurys Monday were bid higher, and yields, which move inversely, fell. The 10-year Treasury yield slipped to 2.41 percent in late trading. The 10-year yield moved just slightly after Harker's remarks to 2.42 percent, and traders will continue to look for more clues on Fed timing.
Traders said the bond market Monday continued to react to the idea that the Federal Reserve may be on hold until at least the middle of the year. Last week, the bond market was expecting both a more hawkish sounding Federal Reserve on Wednesday and better data on wage growth in Friday's jobs report. Since both were disappointing, the market has been adjusting to the idea that the Fed will not consider hiking interest rates when it next meets in March, but wait until at least June.
Gold was weaker Tuesday with the gains in the dollar.
Gold also found buyers, as traders Monday said President Donald Trump's trade talk has made investors nervous. They also pointed to the fact that the timing of his agenda now seems more uncertain, after he said in an interview Sunday that replacing Obamacare may take until 2018. That raises questions about the timing of tax reform and stimulus spending, two agenda items that have caused stocks to rally since the election.
Art Cashin, director of floor operations at UBS, said the stock market was showing signs of consolidation after Friday's big gains. "It looks like the [Trump] agenda is slowing down," said Cashin, noting the weekend comments were a negative factor. "You can't chalk today up to much. The volume was horrific. This is a rather hollow week."
Cashin said stocks may not find much direction ahead of next week, when Fed Chair Janet Yellen testifies before Congress. There are earnings but little important data this week.