Federal Reserve Chair Kevin Warsh has avoided offering forward guidance on where interest rates may be headed, leaving markets to scrutinize how he would respond as inflation, employment and growth data evolve. "Good communication conveys the Fed's reaction function, which is the relationship between economic conditions and the path of the policy rate. And really that's what's essential," said Richard Berner, a professor at New York University who has served on the Fed's research staff. "That's different from forward guidance."

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JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs reported earnings before markets opened Tuesday, with strong equities trading revenue helping support results across the largest U.S. banks. JPMorgan CEO Jamie Dimon said every major business posted record revenue last quarter and noted that the U.S. economy has shown "notable resiliency this year, with stronger business investment and hiring."

The Federal Reserve will purchase about $10 billion of Treasury bills over the monthly period ending Aug. 13, maintaining the same level as the previous two cycles. The New York Fed's open market desk also plans about $17.6 billion in reinvestment purchases. The purchases are intended to support reserve levels ahead of expected pressure from increased Treasury bill supply and a larger Treasury cash balance.