By Amruta Khandekar and Shashwat Chauhan
(Reuters) -Wall Street's main indexes were set for a higher open on Tuesday as Treasury yields fell in the run-up to the Federal Reserve's monetary policy meeting, while investors assessed the latest batch of earnings reports.
The three main indexes rallied more than 1% in the previous session, rebounding from a selloff in the past few weeks that was sparked by surging Treasury yields and the Middle East conflict.
U.S. equities are tracking their third straight month in the red, with the S&P 500 and the Nasdaq on course for their worst October since 2018.
On the earnings front, heavy machinery maker Caterpillar (NYSE:CAT) fell nearly 5% in premarket trading as the company's dealer inventories rose and a large order backlog shrunk, indicating that equipment demand is starting to slow.
Pfizer (NYSE:PFE)'s shares edged 0.7% lower after the drugmaker reported its first quarterly loss since 2019.
Helping broader markets, the yield on the ten-year U.S. Treasury note slid to 4.82%, a day after the Treasury Department said it expects to borrow $76 billion less this quarter than previously anticipated.
"The earnings this morning look mixed. But the 10-year dropping a little bit is an encouragement for the market," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
The quarterly earnings season has crossed the halfway mark, with 77.7% of the 251 companies in the S&P 500 that have reported earnings so far surpassing analysts' estimates, according to LSEG data.
The Fed kicks off a two-day monetary policy meeting on Tuesday at the end of which it is widely expected to hold interest rates steady, according to the CME Group's (NASDAQ:CME) FedWatch tool.
Commentary at the end of the meeting on Wednesday would be crucial in assessing how long monetary policy could stay restrictive amid recent signs of economic strength.
Along with earnings, a slew of labor market data throughout the week will also be in focus, culminating in Friday's non-farm payrolls report, for further clues on the strength of the U.S. economy.
The Bank of Japan tweaked its bond yield control policy again on Tuesday, further loosening its grip on long-term interest rates.
At 8:26 a.m. ET, Dow e-minis were up 59 points, or 0.18%, S&P 500 e-minis were up 13.5 points, or 0.32%, and Nasdaq 100 e-minis were up 35.75 points, or 0.25%.
Pinterest jumped 16% premarket as the image sharing platform beat third-quarter revenue and profit estimates on a stabilizing digital advertising market.
U.S.-listed shares of Chinese companies such as JD.Com, Alibaba (NYSE:BABA), PDD Holdings and Bilibili shed between 1.1% and 2.1% after data showed China's manufacturing activity unexpectedly contracted in October.
VF Corp (NYSE:VFC) dropped 6.1% after the Vans sneaker-maker withdrew its annual forecast, while cloud solutions provider Arista Networks gained 10.3% on an upbeat fourth-quarter revenue outlook.
Sarepta Therapeutics slumped 40.9% as the drug developer's muscle disorder gene therapy failed in a late-stage trial. Shares of Sarepta's client Catalent also fell 11.8%.