Great (Fed) Expectations Point Stocks Higher

U.S. stock market index futures indicated a higher opening on Wednesday, just ahead of Federal Reserve Chairman Ben Bernanke's remarks on the economy before the Senate, with investors widely expecting the Fed chief to preserve the status quo on monetary policy.

In recent days, markets have been aflutter with speculation that an uneven yet quickening recovery would provide the impetus the central bank needs to begin tapering off its massive monetary stimulus to bolster growth.

Late last week, San Francisco Fed President John Williams suggested the central bank could begin hitting the brakes on its easing as early as this summer, sentiments that were echoed by Philadelphia Fed President Charles Plosser and Chicago's regional chief, Charles Evans.

Still, analysts believe Bernanke — supported by other growth-supportive doves who dominate the Fed's Open Market Committee (FOMC) — is unlikely to signal a policy shift. Economic growth abroad remains anemic, and pockets of softness in the world's largest economy still augur well for continued Fed support, market watchers say.

(Read More: Bernanke Expected to Deliver Dovish Message)

"For all the concerns over a Fed tapering, the central bank continues to see downside risks for the global economy despite a marked reduction in risk aversion in financial markets," said Andrew Wilkinson, chief economic strategist at Milller Tabak, in a research note. Meanwhile, "the Fed has made clear the fiscal drag caused by the onset of sequestration and tax increases at the start of 2013."

(Read More: QE Halt Would Be 'Too Violent' for Market: Fed's Fisher)

Markets will also be on alert for the minutes of the April 30/May 1 FOMC meeting at 2 p.m., which will give more insight into the central bank's deliberations on the economy. The Fed will also purchase $1.25-$1.75 billion of 23 -30 year U.S.Treasury notes during the day.

Additionally, investors will also eye U.S. existing home sales data for April, out at 10 a.m. The housing market is seen as the linchpin to a sustained recovery, with the sector a key factor behind the economy's inability to sustain altitude. Still, most housing figures have recently illustrated positive momentum.

"Existing home sales slipped in March, but we suspect they rose last month. The 1.5 percent month-on-month rise in pending home sales in March points to a gain in existing home sales in April of 1 percent, to 4.97 million annualized," said Capital Economics' Paul Diggle, in a research note on Tuesday.

Meanwhile, Lowe's reported earnings on Wednesday that missed analysts' estimates. The company's shares fell in pre-market trading after both revenue and profit fell short.

Target was an early loser, as traders reacted to a first quarter earnings report that missed expectations by a mile. The retailer reported first quarter profit of 77 cents per share, $1.05 excluding certain items, compared to estimates of 85 cents.

Elsewhere, luxury retailer Saks got a kick higher from a New York Post report that said the company has hired Goldman Sachs to assist with a possible sale of the company.

Other companies reporting earnings on Wednesday include American Eagle Outfitters and Guess?, as well as Hewlett-Packard, Eaton Vance, Synopsys, Seaworld Entertainment and Bristow.