U.S. stock index futures rose on Monday on a report that U.S. and China are getting close to a trade deal.
At around 7 a.m. ET, Dow Jones Industrial Average futures were up 65 points, indicating a gain of more than 70 points at the open. Futures on the S&P 500 and Nasdaq 100 were also higher.
The Wall Street Journal reported Sunday that China had proposed to bring down duties on certain American goods in an attempt to strike a deal with the Trump administration. The same report suggested both countries are at the final stage of their negotiations, which could see the country’s leaders meeting at a special summit to sign a trade deal soon.
“Markets expect a deal by the end of March, but the key here will be whether the deal results in the removal of all tariffs,” said Tom Essaye, founder of The Sevens Report. “The reports this morning imply that might happen, but it will have to become reality for US-China trade to provide a sustainable positive catalyst for stocks.”
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The Trump administration touted last week significant progress being made in U.S. negotiations with China. Treasury Secretary Steven Mnuchin told CNBC on Thursday the two sides were getting closer to a deal. White House economic advisor Larry Kudlow also told CNBC “the progress [between the two countries] has been terrific.”
However, The New York Times said in another report that the trade deal being discussed would do little to address key structural issues. These include efforts by the Chinese to curb cybertheft and subsidies the Trump administration argues make it harder for U.S. companies to do business in China.
Shares of global trade bellwethers Caterpillar, Boeing and Deere were all up in the premarket.
The back-and-forth on trade between the two countries has sent ripples through financial markets since last year, with investors fretting how tighter trade conditions could impact corporate profits.
On the economic front, there will be construction spending figures out at 10 a.m. ET.
Source: cnbc.com | Original Link