Futures edge up ahead of business activity data

© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 22, 2022. REUTERS/Brendan McDermid

(Reuters) - U.S. stock index futures ticked higher on Tuesday after a steep selloff on Wall Street in the previous session on concerns about aggressive signals from the Federal Reserve on interest rate increases, with manufacturing and services data on tap.

The S&P flash composite Purchasing Managers' Index (PMI) due at 9:45 a.m. ET, which would provide clues on the strength of the U.S. economy, will follow weak readings from Europe earlier in the day that compounded expectations of a recession in the region and pressured global markets.

Wall Street has closed sharply lower in the last two sessions as investors worried over a Fed gathering later this week in Jackson Hole, Wyoming, where the central bank chair Jerome Powell is expected to reinforce a strong commitment to stamp out inflation running at four-decades high. [.N]

After a rough start to the year, markets rallied since mid-June on hopes inflation has peaked but the summer rally snapped last week on renewed fears around an aggressive monetary policy tightening path by the Fed.

Traders remain split between a 50 basis point and a 75 basis point hike by the central bank at its meeting next month, though economists polled by Reuters expect a 50 basis-point hike. [FEDWATCH]

U.S. Treasury yields retreated a little on Tuesday, a day after scaling past 3% for the first time since July 21, supporting battered megacap growth and technology stocks.

High-growth stocks such as Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) added 0.3% each in trading before the bell, while most banks also edged higher.

At 06:47 a.m. ET, Dow e-minis were up 70 points, or 0.21%, S&P 500 e-minis were up 9.25 points, or 0.22%, and Nasdaq 100 e-minis were up 31.25 points, or 0.24%. Pandemic favorite Zoom Video Communications (NASDAQ:ZM) Inc tumbled 11% after the company cut its annual profit and revenue forecasts.

Palo Alto Networks (NASDAQ:PANW) gained 8.5% after the cybersecurity firm posted upbeat quarterly results and announced a stock split plan.

U.S.-listed shares of Chinese e-commerce giant Pinduoduo (NASDAQ:PDD) rose 2.4% on plans to launch a cross-border e-commerce platform next month which will target the United States as its first market, a source with direct knowledge of the matter said.

JD (NASDAQ:JD).com Inc climbed 5.2% on beating Wall Street estimates for quarterly revenue as lockdowns in China to control the spread of the coronavirus boosted online shopping and the company's "618" shopping event.