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The major U.S. index futures are currently pointing to sharply higher open on Wall Street on Wednesday, with stocks likely to extend the rebound seen in the previous session.

While stocks saw a notable advance during Tuesday’s session, traders may still see stocks as oversold following the recent weakness in the markets.

Concerns the U.S. economy is headed for a recession dragged the Nasdaq and the S&P 500 down to three-month lows on Monday.

Positive sentiment may also be generated in reaction to quarterly results from Disney (NYSE:DIS), as the entertainment giant reported better than expected fiscal third quarter earnings.

Overall trading activity may be somewhat subdued, however, as a lack of major U.S. economic data may keep some traders on the sidelines.

U.S. stocks closed higher on Tuesday, recovering well after three successive days of losses, as investors shrugged off fears of a recession and geopolitical concerns.

The major averages all closed on a firm note. The Dow ended up 294.39 points or 0.8 percent at 38,997.66. The S&P 500 closed up by 53.70 points or 1.0 percent at 5,240.03, while the Nasdaq settled higher by 166.77 points or 1.0 percent at 16,366.85.

Bargain hunting contributed to the strength on Wall Street, as some traders looked to pick up stocks at relatively reduced levels.

The sell-off seen in recent days dragged the Nasdaq and the S&P 500 down to three-month lows on Monday amid concerns about the outlook for the U.S. economy.

“Pockets of volatility are expected to continue as August and September give way to a calmer seasonal period,” said Quincy Krosby, Chief Global Strategist for LPL Financial. “However, it’s important to remember pockets of opportunity are always on the other side of the storm.”

A positive reaction to some of the latest corporate earnings news also generated buying interest, with shares of Uber (NYSE:UBER) spiking by 10.9 percent after the ride-sharing company reported better than expected second quarter results.

Industrial equipment maker Caterpillar (NYSE:CAT) also moved sharply higher after reporting second quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of CSX Corp. (NASDAQ:CSX) also showed a strong move to the upside after the rail transportation company reported better than expected second quarter earnings.

In U.S. economic news, the Commerce Department released a report on Tuesday showing the U.S. trade deficit narrowed in the month of June.

The Commerce Department said the trade deficit shrank to $73.1 billion in June from a revised $75.0 billion in May.

Economists had expected the trade deficit to decrease to $72.4 billion from the $75.1 billion originally reported for the previous month.

The narrower trade deficit came as the value of exports jumped by 1.5 percent to $265.9 billion, while the value of imports rose by 0.6 percent to $339.0 billion.

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