Another volatile session Tuesday for U.S. financial markets, in particular following the release of the FOMC statement. The major equity averages ended with strong gains, however, as the S&P 500 regained about two-thirds of Monday's plunge. The question Wednesday morning is, can they build on that rebound?

U.S. equity markets opened higher yesterday on short covering and bargain hunting, but conceded some of those gains leading up to the FOMC announcement.

The FOMC surprised the market by attaching a time frame to its fed funds target for the first time, saying economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013." The statement did not come without controversy, however, as three hawkish committee members voted against the action.

Treasuries caught a bid following the announcement. It was initially led by the short end of the curve, but the 10-year yield eventually fell to a new all-time low of 2.03%. Yields rebounded as equities moved higher, with the 10-year closing at 2.24%.

The FOMC issued a weakened economic outlook, forecasting: 1) a somewhat slower pace of recovery over coming quarters; 2) that the unemployment rate will decline only gradually; and 3) that downside risks have increased.

The equity market seemed to focus on the outlook at first, giving up its gains. The major averages experienced a very strong snap-back rally, however, including a spike higher in the final 20 minutes of trade.

Since the recent sell-off began, U.S. equity markets have experienced strong intraday rebounds on three occasions.

Last Wednesday, after selling off in the morning with Europe, the major averages rebounded to close with modest gains. They sold off sharply on Thursday.

Last Friday, after again selling off in morning trade with Europe, the major averages rebounded to close mixed. Following the weekend downgrade from Standard & Poor's, they plunged Monday.

Will the third time be the charm? It does not appear so premarket, as futures currently point to a sharply lower open.

Most markets overseas are playing catch-up, though the size of the gains are more modest than one might expect, showing confidence remains shaky following the weakened economic outlook.

There are only a few notable headlines today. China's trade balance ($31.5 billion) grew more than expected in July as exports came in above expectations (20.4%) while imports were in-line (22.9%). The Bank of England released its inflation report, but after quickly selling off the pound has returned to its prior levels. Staying on currencies, the yen has risen to around 76.40 against the dollar, above the level where Japan's Ministry of Finance intervened last week.

Aside from a few notable industry conferences, the important item on today's calendar is the 10-year Note auction.

The economic calendar contains two minor releases, with June wholesale inventories at 10:00 a.m. ET and the July Treasury budget at 2:00 p.m. ET.

The earnings calendar is also thinning out as second quarter earnings season draws to close. There are a few big names today, though, with Walt Disney (DIS) and Macy's (M) exceeding expectations and Cisco (CSCO) reporting after the close.

--David M. Campione, CFA

Dave is an analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.