Stock index futures pointed to a strong open on Wall Street on Tuesday, with futures for the S&P 500 up 1.97 percent, Dow Jones futures up 1.62 percent and Nasdaq 100 futures up 1.61 percent at 3:54 a.m. EDT.

Banks will be in focus after Swiss lender UBS AG said it plans to slash around 3,500 jobs, almost half of them from its investment bank, as it seeks to shave some 2 billion francs from annual costs by the end of 2013.

European stocks were up 1.6 percent in early trade, led by a rebound in cyclical shares such as industrials and miners, but volumes were thin as investors remained wary of another false start after last week's rebound from a 20-percent nosedive quickly fizzled out.

Market players were also cautious ahead of U.S. Federal Reserve Chairman Ben Bernanke's key speech at an annual central bank conference in Jackson Hole, Wyoming on Friday, during which he could unveil fresh measures to revive the struggling economy.

The Fed chairman looks set to discuss ways the central bank could tweak its balance sheet as a means to put further pressure on medium- and long-term interest rates and anchor them at low levels. These could be implemented in September and October at coming Fed meetings.

After the bell on Monday, shares of Goldman Sachs fell 2.4 percent to $104. Goldman CEO Lloyd Blankfein has hired Reid Weingarten, a high-profile Washington defense attorney, according to a government source familiar with the matter.

Investigations continue of Goldman and its role in the 2007-2009 financial crisis.

Shares in Goldman Sachs traded in Frankfurt were down 5.8 percent.

On the macro side, investors awaited data on new home sales for July and the Federal Reserve Bank of Richmond's August indexes on area manufacturing and service sectors.

HSBC's China Flash PMI showed China's factory sector is set to slightly slow in August, soothing concerns of a hard landing for the world's No.2 economy.

Brent crude rose toward $109 on Tuesday, while U.S. crude was up more than $1 as fighting in Libya continued and in anticipation of a fall in U.S. crude stockpiles.

U.S. stocks ended slightly higher on Monday after four weeks of losses as investors hesitated to take big risks without a catalyst for buying.

The Dow Jones industrial average <.DJI> was up 36.85 points, or 0.34 percent, at 10,854.50. The Standard & Poor's 500 Index <.SPX> was up 0.29 point, or 0.03 percent, at 1,123.82. The Nasdaq Composite Index <.IXIC> was up 3.54 points, or 0.15 percent, at 2,345.38.

(Reporting by Blaise Robinson; Editing by David Holmes)