Investing.com - U.S. stock futures pointed to strong gains at the open on Wednesday, as sentiment improved amid a global stock market rally.
During early morning hours in New York, the blue-chip Dow futures jumped 194 points, or 1.2%, the S&P 500 futures rose 25 points, or 1.29%, while the Nasdaq 100 futures rallied 56 points, or 1.37%.
On Tuesday, Wall Street ended mostly higher after a volatile session, as investors remained cautious over the health of China's economy and its potential impact on the timing of a U.S. interest rate increase.
Traders will be keeping an eye on Fed Chair Janet Yellen, who is due to give welcome remarks at the Federal Reserve's annual community banking conference in St. Louis at 3:00PM Eastern time on Wednesday.
Yellen said last week that the U.S. central bank was still likely to raise interest rates before year-end.
Most economists believe the Fed will begin raising rates in December after holding policy steady in September due to concerns over the global economy, particularly China.
On the data front, the U.S. is to release the ADP jobs report for September at 8:15AM ET, followed by the Chicago purchasing managers’ index, due for release at 9:45AM.
Investors also looked ahead to Friday’s U.S. jobs report for September, which could help to provide clarity on the likelihood of a near-term interest rate hike.
The consensus forecast is that the data will show jobs growth of 203,000 this month, following an increase of 173,000 in August, while the unemployment rate is forecast to hold steady at 5.1%.
In Asia, Japan's Nikkei closed up 2.7% on Wednesday, one day after falling to an eight-month low, while China's Shanghai Composite Index tacked on 0.5%, as Asian equity markets stabilized following a steep selloff in the prior session.
Elsewhere, European equity markets rose sharply on Wednesday, following a positive lead from Asia overnight. Germany's DAX, France’s CAC 40 and London's FTSE 100 were all up more than 2% in afternoon trade.
Despite these gains, global stock markets are heading for sharp declines for the third quarter, as fears of a China-led global economic slowdown spooked traders and rattled sentiment over the past few months.
Japan's Nikkei dropped 14.1% in the third quarter, its steepest decline since 2010, while Chinese markets lost 34.1%, the worst performance since the peak of the global financial crisis.
European indices are also on track for heavy losses, with Germany's DAX nearly 11% lower since the end of June, while U.S. markets eyed losses of around 9% for the three months ending September 30.