Wall Street Rallied early in the session Monday after last week’s loss after data showed that manufacturing in the New York region improved and home builders were more optimistic in June. 

The New York Fed's "Empire State" general business conditions index rose to 7.84 from minus 1.43 in May, beating analysts' expectations for zero. A reading above zero indicates expansion.

Separate data revealed that June home builder sentiment rose above a key reading for the first time in seven years. The National Association of Home Builders/Wells Fargo housing-market index rose to 52 in June from 44 in May, the first time the index has reached above 50 since 2006. A reading above 50 signals that builders are generally optimistic about sales trends.

All eyes are on Federal Reserve Chairman Ben Bernanke this week as the Federal Open Market Committee (FOMC) meets June 18-19. Investors fear that the central bank may begin scaling back its bond-buying program after Bernanke in May said that the central bank could possibly begin to downsize its program in the next few meetings if the economy sees enough improvement. The two-day Fed meeting will end on Wednesday with a press briefing and economic forecast from Bernanke.

On the economic calendar for Tuesday, consumer price index, core CPI and housing starts are released at 830am Eastern.