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Futures fluctuate as Wall Street eyes oil

U.S. stocks were expected to open flat to mildly higher on Wednesday, as investors eyed oil. Stocks found some support from a rally in Europe amid further signs of weakness in China's economy.

Crude pared gains to turn mildly lower and trade near $46.30 a barrel, while brent held a touch higher above $49 a barrel.

The preliminary China manufacturing purchasing managers' index (PMI) fell to a six-and-a-half-year low of 47.0 in September, below a 47.5 forecast by analysts in a Reuters poll, data showed.

Asian shares skidded deeper into negative territory following the data, with the benchmark Shanghai Composite stock index closing more than 2 percent lower. Japanese markets were closed for a holiday.

European markets, however, reversed early falls to trade higher in morning London trade.

Those gains offered some support to U.S. stock futures, which reversed early falls to trade flat.

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Dow Jones industrial average stock futures were down about 10 points. Earlier, futures had indicated a rebound in the blue-chip stock index which closed 1 percent lower Tuesday.

"Investor sentiment has been dealt another blow after the China Caixin manufacturing index slipped to a six-and-a-half-year low, fueling Chinese growth fears at a time when concerns are already quite elevated," said Craig Erlam, senior market analyst at trading firm OANDA, in a note.

"Falling demand both domestically and abroad is only going to make the task of achieving (the) seven percent growth (target) that much harder and in fact, there has already been a number of revisions to Chinese growth forecasts this year," he said.

The Asian Development Bank on Tuesday said it expected China, the world's second largest economy, to grow by 6.8 percent this year, down from a previous forecast of 7.2 percent.

In addition to the China PMI data, markets also digest PMI readings from Europe and the September U.S. flash manufacturing PMI at 09:45 a.m. ET.

Chinese President Xi Jinping, visiting the U.S. this week, on Tuesday said China's economy would remain on a "steady course" and reassured the world that China's financial markets will remain stable.

Read More China's Xi defends economy, markets at US address

In the wake of last week's U.S. Federal Reserve decision to keep interest rates at record low levels amid concerns about the global growth outlook, attention was also expected to turn to Fed speakers for further insight into when rates may be raised.

Atlanta Fed President Dennis Lockhart speaks at 12:30 pm ET.

Analysts at Daiwa Capital said in a note that Lockhart is a relatively "centrist" member of the Fed, noting that earlier in the week he suggested a rate hike in the fourth quarter of the year was still on the cards as long as market volatility settles down.

European Central Bank President Mario Draghi speaks before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels at 9 a.m. ET.

A sharp fall in the shares of German car maker Volkswagen was also expected to continue to weigh on sentiment as investors assess the fallout of an emissions scandal.

Volkswagen shares, which have slid more than 30 percent in the past two sessions, tumbled a further 3.8 percent in early Wednesday trade in Europe.

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Back in the U.S., Steelcase, Worthington Industries are expected to report earnings, while the U.S. Treasury is expected to sell $35 billion worth of five-year bonds later in the day.

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