Wall Street set to open higher as investors await US Fed meet

US stocks looked set to open higher as investors saw little room for the US Federal Reserve to raise interest rates in a two-day meeting starting on Tuesday.

The central bank's meeting will conclude with Fed Chair Janet Yellen's press conference at 2:00 pm ET on Wednesday. 

Investors are also watching the Bank of Japan's (BoJ) meeting which starts on Tuesday. Investors have little clue of what path the central bank could take to achieve its 2% inflation target.

The doves in the Fed are most likely to rule over the hawks who support higher rates in the near term, but investors are looking for their comments for clues about a likely hike in December.

Recent data that pointed to a slowdown in job growth and weak retail sales has led traders to price in a mere 15% chance for a rate hike by Wednesday.

The markets have oscillated since September 9 as investors second-guessed the Fed's intention following a series of contrasting comments from its officials.

Wall Street whipsawed on Monday before ending flat as a decline in Apple rubbed the shine from gains in big banks.

"Investors are holding vigil before the Bank of Japan (BoJ) and the Federal Reserve's announcements on Wednesday and I think everything stays quiet until then," said Peter Cardillo, chief market economist at First Standard Financial in New York.

The dollar index and the yen were trading little changed on Tuesday, while gold prices rose slightly.

Dow e-minis were up 56 points, or 0.31% at 8:30 am ET (1230 GMT), with 18,097 contracts changing hands.

S&P 500 e-minis were up 7.5 points, or 0.35%, with 146,059 contracts traded.

Nasdaq 100 e-minis were up 17.25 points, or 0.36%, on volume of 21,796 contracts.

Shares of Tobira Therapeutics rose more than six times to $32.55 after Allergan agreed to buy the company in a $1.7 billion deal. Allergan's stock was down 0.37% at $244.39.

Shares of Lennar were up 2.75% at $46.33 in light premarket trading after the homebuilder reported higher-than-expected profit and revenue for the third quarter. 

PayPal lost 0.62% after Canaccord Genuity downgraded the payments processor's stock to "hold" from "buy".

DTS soared 22% at $41.82 after Tessera Tech agreed to buy the audio equipment maker for $850 million in cash.

Sarepta Therapeutics rose 4.8% to $51.30 after Cowen & Co upgraded the drugmaker's stock to "outperform".