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Dow futures surge 127 points on better-than-expected earnings; Bank of America rises

  • Bank of America shares rose after reporting better-than-expected earnings
  • Congress has to pass a spending bill by the end of Friday, to prevent a government shutdown

U.S. stock index futures posted sharp gains before Wednesday's open on the back of strong quarterly results from some of the biggest banks in the world.

Dow Jones industrial average futures rose 127 points, while S&P 500 and Nasdaq 100 futures gained 9.25 points and 22.75 points, respectively.

On Tuesday, U.S. equities finished the trading day lower, pulling back from the highs seen during the session. During Tuesday trade, the Dow Jones industrial average rose as much as 283 points, breaking the 26,000 mark for the first time.

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on December 29, 2017 in New York.
BRYAN R. SMITH | AFP | Getty Images
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on December 29, 2017 in New York.

Concerns over a possible government shutdown, however, weighed on market sentiment, causing major markets to end in the red.

By the end of Friday, Congress has to pass a spending bill in order to prevent a government shutdown; however, Democrats and Republicans remain at odds over an immigration bill that the Democratic Party wants to pass.

Looking to today's trade, earnings and economic data is expected to sway sentiment. Bank of America reported better-than-expected earnings, sending shares slightly higher. Alcoa is scheduled to report after the close on Wednesday.

On the data front, the business leaders' survey is set for release at 8:30 a.m. ET and industrial production data at 9:15 a.m. ET.

At 10 a.m. ET, the NAHB/Wells Fargo Housing Market Index is set to be released, while the Fed's Beige Book is due at 2 p.m. ET and the Treasury International Capital (TIC) data at 4 p.m. ET.

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When it comes to the economy, investors will be awaiting the latest remarks from Chicago Fed President Charles Evans and Dallas Fed President Robert Kaplan, who are both expected to be present at the American Council of Life Insurers executive roundtable in Palm Beach, Florida.

Meanwhile, Cleveland Fed President Loretta Mester will be in New Jersey speaking about monetary policy communications at the "Tangri Lecture at Rutgers University."

Elsewhere, cryptocurrencies will be of key importance after many major digital currencies posted sharp declines Tuesday. Bitcoin briefly tumbled below $10,000 following comments from South Korean authorities that pointed to stricter regulation on cryptocurrency trading.

—CNBC's Fred Imbert contributed to this report