U.S. stock index futures rose Thursday after a draft Brexit deal was struck between the European Union and the U.K.
Around 7:40 a.m. ET, Dow Jones Industrial Average futures were up 82 points, indicating a gain of about 70 points at the open. Prior to the Brexit reports, futures had been trading flat to lower. Futures on the S&P 500 and Nasdaq 100 were also higher.
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U.K. Prime Minister Boris Johnson said “we have a great new Brexit deal” via Twitter. He called on British lawmakers to back the deal when it’s put before Parliament on Saturday. Meanwhile, European Commission President Jean-Claude Juncker tweeted that the deal was a “fair and balanced” one.
The Northern Irish Democratic Unionist Party (DUP), however, said earlier in the day that it could not support the British government’s Brexit plans “as it stands.”
Nonetheless, markets rallied on the Brexit reports, as the deal removed some investor uncertainty amid heightened concerns about the health of the global economy. On Wednesday, unexpectedly weak U.S. retail sales data fueled fears about a possible recession.
Global economic data points to slower growth, while the U.S. manufacturing sector is already contracting. Among the greatest of the worries plaguing markets is the ongoing U.S.-China trade war.
China emphasized today that the U.S. must remove tariffs in order for the two countries to reach a final agreement on trade. The two economic giants have been embroiled in a trade dispute for more than a year, with each country applying tariffs on billions of dollars’ worth of goods from the other.
Even with Brexit looking promising and a trade deal with China in the works, some investors have doubts it will be clear sailing for stocks the rest of the year without more help from the Federal Reserve. CNBC’s Steve Liesman reported on Thursday that the Fed may soon pause in its latest rate-cutting cycle, depending on economic data and China trade talks. That pause is more likely to occur after the October meeting.
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Back in the U.S., investors are likely to closely monitor a flurry of economic data and earnings reports on Thursday.
The latest weekly jobless claims figures, housing starts and building permits for September, and the Philadelphia Federal Reserve’s manufacturing index for October will be released at 8:30 a.m. ET. Industrial production data for September will follow slightly later in the session.
Source: cnbc.com | Original Link