Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 26, 2022. Reuters / BRENDAN MCDERMID

Wall Street's main indexes were set to open higher on Tuesday, with investors buying into beaten-down banks and megacap growth stocks after a three-day selloff on concerns around aggressive monetary tightening and slowing economic growth., Facebook parent Meta Platforms, Apple Inc, Microsoft Corp, Google owner-Alphabet Inc and Tesla Inc climbed between 1.4% and 2.1% in premarket trading.

Morgan Stanley advanced 1% to lead gains among the big banks.

On Monday, the benchmark S&P 500 index ended below 4,000 for the first time since late March 2021 and the tech-heavy Nasdaq dropped more than 4%.

Both the indexes have dropped about 16% and 26%, respectively, this year due to the war in Ukraine, China's COVID-19 lockdowns roiling global supply chains and rising bond yields as traders adjust to higher U.S. interest rates.

"The market has really been in a down spin," said Sam Stovall, chief investment strategist at CFRA. "Today is really just sort of a short-term bounce from being close to oversold levels and maybe it's in anticipation of a less onerous CPI reading tomorrow and PPI reading on Thursday,"

"So investors, in a sense, are searching for a catalyst right now to indicate that either the worst is behind us or there's more pain ahead."

Data on Wednesday is expected to show consumer prices increased at a slower pace in April, with investors looking for signs of peaking inflation.

New York Fed President John Williams said on Tuesday the Fed's aim of bringing inflation down to its goal without derailing the economy is challenging but doable amid heightened uncertainty on the path of price pressures caused by the war in Ukraine and COVID pandemic.

At 8:17 a.m. ET, Dow e-minis were up 243 points, or 0.76%, S&P 500 e-minis were up 37 points, or 0.93%, and Nasdaq 100 e-minis were up 188.75 points, or 1.55%.

Among other stocks, AMC Entertainment rose 3.4% after it posted better-than-expected quarterly revenue and a narrower loss, as the release of big-ticket films such as "The Batman" drew crowds to movie halls of the world's largest theater chain.

Novavax Inc plunged 22% after the vaccine maker revealed a sharp drop in first-quarter COVID-19 research funding and said it shipped less than a fourth of the total vaccine deliveries slated for 2022.

Peloton Interactive Inc tumbled 24.2% as the fitness equipment maker said the business was thinly capitalized after it posted a 23.6% slide in quarterly revenue.