The Federal Reserve kicks off its two-day policy meeting, at which it is not expected to take any action on interest rates.

Market players will pay close attention to details of when and how the U.S. central bank will start reducing its $4.5 trillion balance sheet, while looking for clues on the timing of the next rise in borrowing costs.

Chances for another rate hike before the end of the year has faded, with just 35% of market players expecting another move by December, as the subdued inflation outlook raised doubts over whether policymakers will be able to stick to their planned tightening path.

The U.S. dollar fell to a fresh 13-month low against a basket of the other major currencies, with traders skeptical the outcome of the Fed's meeting would do much to alter the greenback's recent weak trend.

Besides the Fed, today's economic calendar includes a reading on July consumer confidence.

Google’s parent company, Alphabet reported a 27.7% drop in quarterly profit, as the tech giant recognized a non-deductible $2.74 billion European Union fine in its results.

After Monday's closing bell, Alphabet reported net income of $3.52 billion, or $5.01 per share, on $26.01 billion in revenue, compared to net income of $4.88 billion, or earnings of $4.49 per share, on $21.5 billion in revenue a year ago.

Analysts were expecting Alphabet to report earnings of $4.46 per share on revenue of $25.6 billion. If not for the fine, Alphabet said that earnings per share would have been $8.90 in the second quarter.

Despite earnings that topped expectations on both the bottom and top line, shares of Alphabet slipped around 3% in pre-market trade.

Meanwhile, U.S. stock futures pointed to a muted open on Wall Street, with the blue-chip Dow futures indicating a gain of 16 points, or around 0.1%; the S&P 500 futures ticked up 3 points, or about 0.1%, while the tech-heavy Nasdaq 100 futures were little changed.

The CBOE Volatility Index, a popular measure of Wall Street fear, was on track to open down 2% at 9.23, which would be its lowest level since 1993.

German business confidence improved in July, hitting the third record high in as many months as Europe's largest economy powered ahead and morale lifted across industry.

A survey from the Munich-based Ifo economic institute showed its business climate index, based on a monthly survey of some 7,000 firms, rose to 116.0 from 115.2 in June. "Sentiment among German businesses is euphoric," Ifo chief Clemens Fuest said in a statement.

The euro was up slightly at 1.1650 against the dollar, not far from a 23-month high of 1.1684.

Meanwhile, U.S. earnings season is gathering momentum, with dozens of companies due to report, including Dow components like Caterpillar, United Technologies, DuPont and McDonald's all out ahead of the opening bell.

General Motors, Seagate Technolog, Eli Lilly, Kimberly-Clark, PulteGroup, Newmont Mining, AK Steel and JetBlue are also among the handful of names posting results before the open.

After the close, AT&T, Advanced Micro Devices and Chipotle release earnings. U.S. Steel, Juniper Networks, Akamai and Express Scripts are also on the docket.

Oil prices continued their march higher, extending gains into a second session, as fresh pledges from Saudi Arabia and Nigeria to respectively pull back on exports and output boosted sentiment.

At an Organization of the Petroleum Exporting Countries meeting on Monday, Saudi Arabia announced it would cut August exports to 6.6 million barrels a day, which would be a million less than a year earlier.

In addition, Nigeria, which has been exempt from this year’s OPEC-led production-cut deal, pledged to cap output once it reaches a level of 1.8 million barrels a day. The cartel’s latest data put the country’s output at around 1.7 million.

In recent trading, U.S. crude was at $46.83 a barrel, up 49 cents, or around 1.1%, while Brent oil tacked on 49 cents to $49.09 a barrel.

Investors now looked ahead to weekly data from the U.S. on stockpiles of crude and refined products. Industry group the American Petroleum Institute is due to release its weekly report at 20:30 GMT.