Stock futures saw small, cautious gains on Tuesday, trading in line with European markets, after a bombing at a Manchester, England, concert set Wall Street on edge.  

S&P 500 futures were up 0.15%, Dow Jones Industrial Average futures increased 0.24%, and Nasdaq futures grew 0.2%.

The deadly attack at an Ariana Grande concert at the Manchester Arena late Monday claimed 22 lives, injured as many as 60 more, and is being treated as a terrorist incident, a spokesman for the Greater Manchester Police has confirmed. The attacker died at the scene after using a self-detonating explosive in the 21,000-seat capacity arena. Police are investigating whether he acted alone or with assistance. ISIS has claimed responsibility for the attack, according to Reuters.  

The incident is the deadliest terrorist attack on British soil since July 2005, when Muslim extremists killed 52 people with three separate suicide bombs across London's transport system at the height of the morning rush-hour commute.

European markets were higher, largely following substantial gains in U.S. equities a day earlier. Germany's DAX rose 0.54%, the CAC 40 in France increased 0.69%, and the FTSE 100 in London gained 0.17%.  

Wall Street rose on Monday after a series of deals with Saudi Arabia lifted defense stocks. The S&P 500 ended the day less than 10 points from its all-time closing record achieved a week earlier. Shares of Lockheed Martin (LMT - Get Report) and Dow component Boeing (BA - Get Report) rose Monday after both companies were seen walking away as winners from the weekend's Saudi deals bonanza, which saw Donald Trump and representatives for American companies inking more than $350 billion of deals.

The White House hopes to sell its 2018 budget proposal as a "taxpayer first" plan that makes deep cuts to a number of programs while raising spending on border security and defense. The Trump administration will send the budget proposal to Congress on Tuesday, outlining its wish list for how the federal government will spend its money next year.

The plan, titled "A New Foundation for American Greatness," will include $3.6 trillion in spending reductions by slashing funds for entitlements and discretionary programs while increasing allocations for items including law enforcement, defense and school choice. About $600 billion in cuts would be made to Medicaid over the next decade, while cuts to food stamps would amount to $193 billion over 10 years. Trump promised on the campaign trail that he would not enact cuts to Medicaid should he become president. 

AutoZone (AZO) declined by 4% after falling short of earnings and sales estimates over its fiscal third quarter. The car parts retailer earned $11.44 a share over its quarter, up from $10.77 in the year-ago quarter, but below consensus of $11.99. Revenue of $2.62 billion fell short of estimates of $2.71 billion. Domestic same-store sales fell 0.8%, a surprise to analysts anticipating growth of 2.7%. 

Agilent Technologies (A - Get Report) rose nearly 5% in premarket trading after a better-than-expected quarter. Earnings of 50 cents a share grew from 28 cents a share in the same quarter a year earlier, while revenue increased 8% to $1.1 billion. Analysts expected earnings of 48 cents a share and revenue of $1.05 billion. 

 
Homebuilder Toll Brothers ( TOL - Get Report)  rose after quarterly earnings and sales topped Wall Street estimates.

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