Stock index futures ticked up late on Tuesday, pointing to a stronger opening on Wednesday, after President Barack Obama stressed a freeze on government spending and the need to lower corporate tax rates.
In his State of the Union address to Congress, the president proposed a five-year freeze on some government spending to tackle the budget deficit.
Obama also called on lawmakers to work with him to cut the corporate tax rate, and simplify the tax code by eliminating loopholes favorable to specific industries while lowering overall rates.
The corporate tax proposal might have a beneficial effect on the market but these things have long journeys before being accomplished, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
Overall, I don't think there was anything surprising tonight and I don't expect much market reaction tomorrow.
S&P 500 futures rose 0.9 points and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 4 points, and Nasdaq 100 futures added 2 points.
U.S. Treasury bond futures traded modestly lower on profit-taking.
During regular equity trading on Tuesday, Wall Street ended little changed after a late rally offset disappointing results from blue chips 3M and Johnson & Johnson.
The Dow Jones industrial average <.DJI> finished down 3.33 points, or 0.03 percent, at 11,977.19. The Standard & Poor's 500 Index <.SPX> was up 0.34 point, or 0.03 percent, at 1,291.18. The Nasdaq Composite Index <.IXIC> was up 1.70 points, or 0.06 percent, at 2,719.25.
(Additional reporting by Richard Leong; Editing by Kim Coghill)