U.S. stocks looked headed for a strong bounce on Tuesday, as traders took cheer from promises by Chinese President Xi Jinping to open the country’s markets.
Xi’s pledges, made at a major conference in Asia, may help to soothe fears of an all-out trade war between the U.S. and China, a factor that has been driving volatility for equities.
Futures for major U.S. stock markets climbed more than 1% across the board.
Those gains came after late-session jitters linked to reports that the Federal Bureau of Investigation raided the office of President Donald Trump’s personal lawyer, Michael Cohen.
What did the main benchmarks do?
Dow Jones Industrial Average futures
YMM8, +1.07%
surged 251 points, or 1%, to 24,267, while S&P 500 futures
ESM8, +1.08%
gained 27.4 points, or 1%, to 2,646.75. Nasdaq-100 futures
NQM8, +1.53%
jumped 98.5 points, or 1.5%, to 6,596.
Stock markets sold off toward the end of Monday’s session as news of the FBI raid hit investors. The Dow industrials
DJIA, +0.19%
which had surged by as much as 440 points during the session, closed up 46.34 points, or 0.2%, at 23,979.10.
The S&P 500
SPX, +0.33%
fell back from a gain of 1.9% to close just 0.3% higher, a move that made for the worst final hour of trading for the index since Sept. 27, 2011. The Nasdaq Composite Index
COMP, +0.51%
gained 2.3% at one point, but finished up only 0.5%.
What’s driving markets
A global equity rally was triggered as Chinese President Xi told the Boao Forum that Beijing is developing plans to give foreign companies greater access to financial and manufacturing sectors. These include a cut in tariffs on car imports and an improvement in protection of intellectual property, among other measures.
While Xi didn’t mention the continuing trade spat with the U.S., which has contributed to bouts of volatility for stocks worldwide, his promises appear to address some of Trump’s biggest gripes about trade with China.
“In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place,” said Xi.
Trump has threatened tariffs on up to $150 billion of Chinese products, which Beijing has answered with levies of its own and vows to not yield to U.S. pressure. Even so, Xi’s comment’s should encourage hopes that a trade war between the countries can be averted, something which contributed to Monday’s U.S. gains.
Trade optimism could, for now, push aside concerns about the FBI’s seizure of records held by Michael Cohen, a lawyer for Trump. The records are related to a $130,00 payment to adult-film actress Stormy Daniels, who alleges she had a brief affair with the president. Trump dismissed the raid as a “witch hunt.”
Read: Here’s what FBI raid on Trump lawyer’s office means for the stock market
Elsewhere, the U.S. is preparing for a possible military strike against Syrian President Bashar al-Assad over a suspected chemical-weapons attack that killed civilians. “It will be met, and it will be met forcefully—when, I will not say,” Trump said Monday evening, ahead of a meeting with senior military leaders.
What are strategists saying?
“While China may still be teeing up its reciprocal response to the $100bn in Tariffs from the U.S., Xi has shown good intentions via his speech. We are still clinging on with gritted teeth to our belief that a trade war will be averted,” said Jasper Lawler, head of research at LGC, in a note to clients.
What data are in focus?
The National Federation of Independent Businesses index of small-business optimism in March is due at 6 a.m. Eastern Time. A reading on producer prices for the same month is due at 8:30 a.m. Eastern, followed by a report on February wholesale inventories at 10 a.m. Eastern.
Read: The economy is fine now, but watch out for 2020, top economist says
Which stocks could be active?
Shares of VeriFone Systems Inc.
PAY, -1.12%
could add to a late-session rally after the payment and business services provider said it has agreed to a $3.4 billion private-equity acquisition by a group led by Francisco Partners. The deal is worth $23.04 a share in cash, a premium of 54% on Verifone’s closing price Monday of $15.
Shares of vTv Therapeutics Inc.
VTVT, -4.68%
sank 70% late Monday after the drug developer said a late-stage clinical trial of its Alzheimer’s treatment disappointed.
Tupperware Brands Corp.
TUP, -0.38%
could follow late-Monday losses after the plastic-container maker lowered its first-quarter earnings guidance.
Energous Corp.
WATT, +5.25%
rallied 13% late Monday after the developer of wire-free charging technology said the Federal Communications Commission has approved its near-field transmitter WattUp.
First-quarter earnings season will kick off in earnest on Thursday and Friday, as BlackRock Inc.
BLK, +0.23%
, Wells Fargo & Co.
WFC, +0.04%
and JPMorgan Chase & Co.
JPM, +1.20%
are all expected to report results.
What are other markets doing?
Asian stocks got a lift after the Chinese premier’s speech, with Hong Kong’s Hang Seng Index
HSI, +1.65%
rising 1.5%. European stocks opened higher across the board.
Gold futures
GCM8, -0.04%
slipped 0.4% to $1,335.10 an ounce. The ICE U.S. Dollar Index
DXY, +0.00%
rose 0.1% to 89.943. Oil prices
CLK8, +1.37%
added 1.5% to $64.35 a barrel.
Source : MTV
