After being clobbered in 2022 by the Fed's fastest pace of rate hikes since the 1980s, Wall Street ended the previous week on an upbeat note after data showed a smaller-than-expected rise in average earnings in December as well as a decline in U.S. services activity.
The benchmark S&P 500 and the Nasdaq snapped four weeks of declines on Friday as investors hoped signs of a slowdown in the U.S. economy could allow the Fed to take a less hawkish stance on future monetary policy tightening.
A key inflation report due on Thursday will provide further cues on the state of price pressures and the outlook for interest rates.
The U.S. Labor Department's consumer prices index (CPI) report is expected to show prices increased by 6.5% year-on-year in December, moderating from a 7.1% rise in November.
"Although U.S. jobs figures came in above expectations at the end of last week, suggesting the labor market is still tight, investors seem to have focused on wage growth coming in slightly below what had been penciled in," said Russ Mould, investment director at AJ Bell.
"Sentiment still feels as fragile as a teacup and U.S. inflation numbers on Thursday could provide a key test for investor confidence."
Investors will also closely monitor the weekly jobless claims and University of Michigan's consumer sentiment report due later in the week for more clues on the strength of U.S. economy.
U.S.-listed shares of Alibaba Group Holding Ltd rose 4.8% in premarket trade on news that Ant Group's founder Jack Ma will give up control of the Chinese fintech giant in an overhaul.
Shares of other Chinese firms such as Baidu Inc and Pinduoduo Inc rose 1.5% and 2.7%, respectively, as a full reopening of China's borders, since the start of the pandemic, added to bets of a robust recovery in the world's second-largest economy.
Major U.S. banks such as JPMorgan Chase & Co and Wells Fargo & Co will kick off the quarterly earnings season at the end of the week.
At 6:21 a.m. ET, Dow e-minis were up 89 points, or 0.26%, S&P 500 e-minis were up 12.5 points, or 0.32%, and Nasdaq 100 e-minis were up 30.25 points, or 0.27%.
Tesla Inc climbed 1.5% as the electric-vehicle maker indicated longer waiting times for potential buyers of some versions of the Model Y in China, signaling that recently announced price cuts could be stoking demand in the company's second-largest market.
(Reporting by Shubham Batra and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta)
