Futures Slide Ahead of Key Slovakia Vote

Futures slipped Tuesday following a sharp rally in the previous session and as investors stayed cautious ahead of a key vote in Slovakia to expand the euro zone rescue fund.

The vote in Slovakia, the last of the euro zone’s 17, is part of a process to expand the powers of the European rescue fund or EFSF. All euro members have to approve the amendment, but resistance among certain members of the four-party ruling coalition in Slovakia has grown.

Stocks surged sharply in the previous session, with the Dow logging its best five-day point gain since Dec. 2008, amid optimism that France and Germany's pledge would help resolve the euro zone debt crisis and rescue the region's struggling financials. However, volume was relatively light with trading subdued due to Columbus Day.

Over the weekend, German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to present a solution for the euro zone debt crisis within a two-to-three week period.

“If they (euro zone leaders) don’t come up with something that has some form of a roadmap with credible muscle behind it in that period of time, then people are going to start building into their forecasts what up to now have been possibilities," John Haynes, head of research at Investec told CNBC. "They will become probabilities and the people in the real world, like CEOs, will start to plan against the possibility becoming a probability and will take precautionary measures."

Investors will be focusing on Alcoa, which kicks off third-quarter earnings season after the bell on Tuesday. The Dow component and aluminum producer is expected to post earnings of 22 cents a share, according to a Thomson Reuters poll.

“The core earnings capacity of the US economy is still doing pretty well, but no one is going to not take the opportunity to mark to market the expectations for the fourth quarter and beyond,” said Haynes. “The third quarter is always a difficult quarter. Every year, this is the confessions season."

Citigroup said Goldman Sachs will likely post a loss of 65 cents a share in the third quarter versus a previous EPS view of 10 cents, due to weakness across trading and investment banking, market declines and wider credit spreads during the period.

Dollar Thrifty slipped after the car rental company said it will continue as a stand-alone firm after it failed to get a final takeover proposal from Hertz Global or others that meets antitrust concerns. Meanwhile, Nomura raised its price target on Dollar Thrifty to $87 from $78.

Meanwhile, 99 Cents Only Stores rallied after the retailer said it will be purchased by affiliates of Ares Management and Canada Pension Plan Investment Board for approximately $1.6 billion.

On the economic front, small businesses grew slightly more confident in September for the first time in seven monthsas their sales outlook improved, according to the National Federation of Independent Business.

Meanwhile, the minutes of Federal Open Market Committee is scheduled to be released at 2pm ET. And the government is scheduled to auction $32 billion in 3-year notes at 1pm ET, the first of thee major auctions this week.

Meanwhile outgoing ECB President Jean-Claude Trichet said early on Tuesday that the crisis in the euro zone had become “systemic” and that there was a rapidly rising risk of contagion.

—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC

On Tap This Week:

TUESDAY: 3-yr note auction, FOMC minutes, P&G shareholder mtg; Earnings from Alcoa, interim results from Chevron
WEDNESDAY: Weekly mortgage apps, 10-yr note auction, Fed's Plosser speaks, Fed's Pianalto speaks, Oracle shareholders mtg; Earnings from PepsiCo
THURSDAY: International trade, jobless claims, oil inventories, 30-yr bond auction, Fed's Kocherlakota speaks; Earnings from JPMorgan, Google
FRIDAY: Retail sales, import/export sales, consumer sentiment, business inventories, new iPhones available; Earnings from Mattel