Wall Street to open higher on hopes of U.S.-China trade talks

Business

(Reuters) – U.S. stock index futures pointed to a higher open on Friday as hopes that the United States and China would start new trade talks calmed fears of a trade war and as technology stocks rose.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 7, 2018. REUTERS/Brendan McDermid

Beijing on Thursday welcomed an invitation from Washington for a fresh round of talks. But the timing of the proposed talks remains unclear, with President Donald Trump saying that the United States was under no pressure to make a deal.

Investors have cheered the efforts to defuse trade tensions, sending stocks higher. The Dow Jones Industrial Average ended Thursday 1.8 percent below its all-time high, hit on Jan. 26.

“Markets seem hopeful that China is open to trade talks and so is the United States, it is the perception of trade talks moving forward that has given confidence to investors,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

Shares of Apple, which led the market on Thursday, were up 0.3 percent in premarket trading. The iPhone maker has said a “wide range” of its products could be hit by tariffs.

Other heavyweight stocks such as Microsoft, Alphabet, Facebook and Amazon.com were up between 0.20 percent and 0.35 percent.

At 8:34 a.m. ET, Dow e-minis were up 31 points, or 0.12 percent. S&P 500 e-minis were up 3.25 points, or 0.11 percent and Nasdaq 100 e-minis were up 21.5 points, or 0.28 percent.

Chipmakers, which also rely on Chinese customers for a major chunk of revenue, also rose. Micron and Nvidia were up more than 1.3 percent and Intel gained 0.3 percent.

Walmart fell 0.7 percent after Goldman Sachs raised questions around the retailer’s purchase of a majority stake in India’s Flipkart.

NiSource tumbled 7.2 percent after fire investigators suspected the “over-pressurization of a gas main”, belonging to the utility’s unit Columbia Gas, caused a series of gas explosions in Boston suburbs.

U.S. retail sales recorded their smallest gain in six months in August as consumers cut back on purchases of motor vehicles and clothing, but upward revisions to July data likely keep intact expectations of strong economic growth in the third quarter, data from the Commerce Department showed.

The Federal Reserve is set to publish industrial production data at 9:15 a.m. ET, which is expected to have climbed 0.3 percent in August after a 0.1 percent rise in July.

The Fed tends to look at capacity use measures for signals of how much “slack” remains in the economy — how far growth has room to run before it becomes inflationary.

The University of Michigan U.S. September consumer sentiment index is expected at 10 a.m. ET.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta

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