Futures flat, but Syria worries continue to weigh

U.S. stock index futures pared their early losses to trade flat Wednesday following sharp losses in the previous session, but worries of a potential military strike against Syria continued to weigh.

Equities have tumbled for two days amid escalating concerns over Syria. On Monday, Secretary of State John Kerry said that Syria's use of chemical weapons was "undeniable."

And senior U.S. officials told NBC News the U.S. could launch missile strikes on Syria as early as Thursday. President Barack Obama and his officials have conducted a flurry of international consultations this week on how to respond to a alleged chemical weapons attack by Syria on its own citizens.

"Equities globally look set for a very rough ride over the coming months—the Syrian crisis feels like the spark the markets have been searching for. There are several 'known knowns' coming to spoil the market's recent party, with QE taper, German elections, Australian elections and a possible emerging markets liquidity squeeze," said IG market strategist Evan Lucas in a research note.

Fears and uncertainty over Syria pushed Brent crude oil to a six-month high around $115 a barrel, while safe haven gold spiked to hit a 3-1/2 month peak.

(Read more: Oil prices seen higher but shock not yet in the cards)

Joy Global slumped after the mining equipment maker posted a decline in quarterly orders and warned of sharply lower revenue.

On the economic front, the National Association of Realtors is scheduled to release pending home sales data, a leading indicator of housing activity, for July at 10 a.m. ET. Economists in a Reuters survey expect a 0.5 percent drop compared with a 0.4 percent decrease in June.

Earlier, weekly mortgage applications fell for a third-straight week as average rates hit their highest level in 2013, though demand for purchase loans increased, according to the Mortgage Bankers Association.

Weekly oil inventories is due for release at 10:30 am ET, and are expected to show a build in supply. U.S. oil production is about 7.3 million barrels per day, the highest level since the early 1990s. At the same time, demand is falling as drivers are using less gasoline as more fuel-efficient vehicles hit the roads.

The Treasury is scheduled to auction $35 billion in five-year notes with the results available shortly after 1pm ET.

"Auction performance has weakened recently, after remaining steady since September 2012, the bid-cover ratio has declined about 0.4 over the past two months. The previous two auctions have tailed as well. However, underlying demand, particularly from foreign investors, has remained strong.The market has set up for the upcoming auction, in our view," said Bank of America's Ajay Rajadhyaksha and Dean Maki.

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

WEDNESDAY: Pending home sales index, oil inventories, 5-yr note auction; Earnings from Williams-Sonoma
THURSDAY: GDP, jobless claims, corporate profits, natural gas inventories, 7-yr note auction, Fed's Lacker speaks, Fed's balance sheet/money supply, Fed's Bullard speaks, AMR hearing, weekly rail numbers; Earnings from Campbell Soup, Pall, Salesforce.com, Splunk, Krispy Kreme
FRIDAY: Personal income & outlays, Fed's Bullard speaks, Chicago PMI, consumer sentiment, farm prices

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