Stock index futures surged more than 1 percent on Monday on relief over a deal in Washington to raise the debt ceiling, avoiding an unprecedented default.

Lawmakers were expected to vote on Monday on the White House-backed agreement, which includes budget cuts of $2.4 trillion. The deal was seen passing the Democratic-led Senate, but it faces tougher opposition in the U.S. House of Representatives, where both conservative Tea Party supporters and liberal lawmakers have criticized it.

Even though a default was considered unlikely by many investors, equities grew increasingly volatile as Washington was stalemated. Wall Street ended its worst week in a year last week.

While no one could imagine there being no compromise passed, no one could also imagine it taking this long to get one. So there's justification for the rally because it takes that anxiety away, said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York.

Gold, seen as a safe haven in times of economic uncertainty, fell 0.7 percent following the deal, while U.S. crude oil climbed 1.1 percent.

Even with a deal, many investors remained concerned about a possible downgrade of the United States' AAA sovereign debt rating, as well as continued issues over European debt. Some analysts said Monday's rally in futures could be short-lived. The FTSEurofirst 300 <.FTEU3> index of top shares was up 0.6 percent.

Based on the comments Standard & Poor's has made so far, they've backed themselves into a corner, making it very likely that we could see a downgrade, Pursche said. However, since that is partially priced in and rating agencies don't have as much credibility as they used to, I don't know how big of a material impact it will have.

S&P 500 futures rose 15.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures soared 153 points, and Nasdaq 100 futures jumped 27.5 points.

In earnings news, Allstate Corp recorded a second-quarter loss as its catastrophe losses soared 268 percent, while Loews Corp posted quarterly profits below estimates it was hit by higher catastrophe losses and lower income from its biggest holding, CNA Financial .

Separately, Humana Inc raised its full-year profit view, sending the stock up 5.5 percent to $78.68 before the bell.

Economic indicators on tap include June construction spending, which is seen as unchanged, and July ISM manufacturing data. ISM is seen coming in at 54.9, down from a read of 55.3 in June. July's non-farm payroll number, due Friday, will also be a focus for investors.

HSBC Holding Plc reported a surprise first-half profit and said it would cut 30,000 jobs as it retreats from countries where it is struggling to compete. U.S.-listed shares of the bank rose 3.8 percent to $50.73 in premarket trading.

Stocks fell for five straight days last week, with the S&P down 3.9 percent over the period on the political logjam in Washington over the debt ceiling.

(Reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)