Stock futures held higher on Tuesday as Federal Open Market Committee members convened for their widely anticipated meeting and U.S. housing starts in August were weaker than anticipated.
S&P 500 futures were up 0.32%, Dow Jones Industrial Average futures added 0.3%, and Nasdaq futures rose 0.3%.
Speculation over the Federal Reserve's likelihood of moving on interest rates sooner rather than later has caused waves on Wall Street in recent weeks. A rush of weak data, including snapshots of retail, industrial and inflation numbers for August, have pushed out the chances of a hike to later this year, though Fed members continue to spout more hawkish rhetoric.
The chances of a rate hike in September sit at 12%, according to CME Group fed funds futures. Most analysts are betting on a rate hike in December, which has a 45% likelihood.
The FOMC is set to meet for two days beginning Tuesday, culminating in an announcement, forecasts and press conference from Fed Chair Janet Yellen on Wednesday afternoon.
The Bank of Japan was also on watch as members meet for a two-day discussion on monetary policy. Unlike the Fed, market analysts are mixed on whether the central bank will make a move, including increasing stimulus, this month.
Housing construction fell below estimates in August as recovery in the housing sector came in fits and starts. Housing starts fell 5.8% from July, coming in at a seasonally adjusted annual pace of 1.14 million, according to the Commerce Department. Analysts expected an annual pace of 1.18 million. Permits came in flat at 1.14 million.
Crude oil prices pulled back on Tuesday as earlier hopes began to fade that a production freeze agreement between Organization of Petroleum-Exporting Countries could come to pass. The chances of a deal rose on Monday after Venezuelan President Nicolas Maduro said a deal between OPEC and non-OPEC countries to curb output was close. Worries over international supply have dragged on prices since oil began its descent more than a year ago.
West Texas Intermediate crude oil fell 1% to $42.79 a barrel.
Tobira Therapeautics (TBRA) soared 500% in premarket trading after Allergan (AGN - Get Report) agreed to purchase the biopharama in a deal worth $1.7 billion. Allergan agreed to pay $28.35 a share upfront, in addition to payment for certain milestones. The deal is expected to close by the end of the year.
Lennar (LEN - Get Report) added nearly 3% after reporting a positive quarter on the back of overall strength in the U.S. housing market. Quarterly profit rose to $1.01 a share over the quarter, up from 96 cents a share a year earlier. Analysts had expected profit of 89 cents a share. Revenue climbed 13.7% to $2.83 billion.
Wells Fargo (WFC - Get Report) rose 1% ahead of prepared testimony from CEO John Stumpf to the Senate Banking Committee on Tuesday. Stumpf is expected to apologize to the bank's customers for opening unauthorized accounts to drum up sales numbers. U.S. regulators charged the company $185 million last week over illegal sales practices. The bank now plans to eliminate sales targets beginning next year.