House Speaker John Boehner's suggestion that he was open to including higher tax rates on the wealthiest Americans has been described as "progress" by the White House. President Barak Obama responded to the offer with his own compromise on both tax increases and spending cuts.
With few major economic or corporate reports on the agenda Tuesday, investors will be looking for further evidence that a deal is being hammered out in Washington.
Those fiscal cliff hopes boosted Bank of America(BAC) shares, which were up 2.8% in premarket trading, and JPMorgan(JPM), which gained 1.1%.
After the closing bell Tuesday, tech giant Oracle(ORCL) will report quarterly results.
Late Monday, Apple(AAPL)lost an important ruling when a federal judge denied its request for a permanent ban on 26 Samsung products that Apple charged -- and a jury ruled -- had willfully infringed Apple's patents. However, Apple shares were trading 1.4% higher in premarket.