Wall Streets stocks were set to rebound on Wednesday on hopes the European debt crisis might ease after Germany's top court smoothed the way for Berlin's participation in bailout packages.

Major stock indexes recorded a third straight day of losses on Tuesday, and the S&P is down 14.5 percent from its highest point in 2011, reached in April.

European stocks bounced back from a two-year low on Wednesday after the German court rejected lawsuits aimed at blocking the country's participation in aid to Greece and other euro zone countries.

But the court said the government must seek approval of a parliamentary committee before granting aid, which could further slow its response. The FTSEurofirst 300 index of top European shares was up 2 percent.

We've been in a trading range and yesterday we hit the bottom of that. The news out of Europe looks positive for the market, but I see this as a short-term technical rebound, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

S&P 500 futures advanced 15.3 points and were 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 were up 103 points, and Nasdaq 100 futures gained 25.25 points.

Yahoo Inc will be in the spotlight after Chairman Roy Bostock fired Chief Executive Carol Bartz over the phone on Tuesday, ending a tumultuous tenure marked by stagnation and a rift with Chinese partner Alibaba. Yahoo shares rose 6.5 percent to $13.75 in premarket trade.

Nvidia Corp gained 5.2 percent to $13.87 premarket after the chipmaker forecast sales well above expectations.

Bank of America Corp , which has lost almost half of its market value this year, said the heads of consumer banking and global wealth and investment management left in a broad reorganization. The stock rose 2.7 percent to $7.18 premarket.

U.S. stocks fell for a third day on Tuesday on fears Europe was failing to tackle its debt crisis, prompting worries the market was heading to new lows for the year.

The CBOE Volatility index <.VIX>, Wall Street's so-called fear gauge, spiked 9 percent to 37 on Tuesday. The index usually moves inversely to the S&P 500.

If stocks test their early August lows in the coming days to weeks, signs of abating downward intensity exhibited in the VIX would be a bullish signal, said BBH's technical market analyst Ari Wald.

U.S. President Barack Obama, facing waning confidence among Americans in his economic stewardship, plans some $300 billion in tax cuts and government spending as part of a job-creating package, according to various reports. Obama will unveil his plan in a speech on Thursday.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)