U.S. stock index futures turned higher after initially slipping as tensions in the Middle Eastand oil prices hitting above $100 a barrel continued toweigh on stocks ahead of more Congressional testimony from Federal Reserve Chairman Ben Bernanke.
U.S. private employers added 217,000 jobs in February, beating analysts' expectations, according to ADP Employer Services, a payrolls processor, and Macroeconomic Advisers. In January, private employers added 189,000 jobs, revised from 187,000.
Economists expect the government's nonfarm payrolls report on Friday will show an overall rise of 185,000, with a 190,000 gain in private payrolls.
Concerns over escalating tensions in the Middle East overshadowed strong manufacturing data on Tuesday and sparked a selloff.
Worries that unrest is spreading, particularly to Saudi Arabia, rattled investors’ nerves. On Tuesday, a report that Iran clamped down on anti-government protesters helped send oil higher in morning trading. Worries about a report, later denied, that Saudi tanks had entered Bahrain also shook global stock markets.
“Remember that this is all about perception … and any perception that there is going to be supply disruption from Saudi Arabia will have an impact on oil prices,” Mohammed Apabhai, head of Asia Pacific trading at Citi told CNBC.
Oil also received a boost after industry data showed a surprise fall in U.S. crude inventories on lower imports. Weekly oil inventories are due out at 10:30 a.m.
Some traders also were worried that the Fed may be "quietly" limiting its quantitative easing program of stimulating the economy through bond purchases. On Tuesday, the Fed bought only $1.8 billion, "about $5 billion less than what we've seen with QE2," said Todd Schoenberger, managing director at LandColt Trading, referring to the second round of quantitative easing.
"Remember—this market is being powered by Fed accomodation," Schoenberger said. "Positive earnings reports are the gravy on top, but the real octane comes from liquidity injections."
In other economic news, the Fed’s beige book, released at 2 p.m., will offer further clues on the health of the economy.
New data on applications for home mortgages released before the bell showed applications fell last week and refinance activity dropped.