U.S. stock-index futures pointed to a higher open on Tuesday, suggesting Wall Street would extend the previous session’s bounce as concerns continued to fade over global trade policy.
Major indexes had their best session since 2015 on Monday, although that comes after the worst week for stocks in about two years. Last week’s sharp decline was driven by concerns over a potential trade war, a factor that appeared to wane on Monday. However, the issue will likely continue to be a driver of market activity as investors gauge the likelihood of any protectionist measures and price the impact of any retaliatory measures from trading partners.
What are the main benchmarks doing?
Dow Jones Industrial Average futures YMM8, +0.49% advanced by 141 points, or 0.6%, to 24,332, while S&P 500 futures ESM8, +0.42% added 15.75 points, or 0.6%, to 2,675.25. Nasdaq-100 futures NQM8, +0.72% tacked on 66.50 points, or 1%, to 6,840. Given the move implied by futures, the S&P could turn positive for the year on Tuesday; it is currently down 0.5% for 2018.
On Monday, the Dow DJIA, +2.84% closed higher by 669.40 points, or 2.8%, notching its third-largest point gain in its history, as well as its biggest percentage rise since August 2015. The S&P 500 SPX, +2.72% climbed 2.7%, and the Nasdaq Composite COMP, +3.26% jumped 3.3%.
Despite Monday’s gains, recent trading has been pronounced to the downside. The Dow is down 3.3% in March, and it is off 2.1% thus far this year. The S&P is down 2% thus far this month, while the Nasdaq is down 1.5% in March.
Read: The Dow and S&P 500 have already doubled the number of 1% moves seen in all of 2017
What’s driving markets?
Fears about a possible trade war have weighed on markets around the world this month, as President Donald Trump threatens tariffs on at least $50 billion of Chinese goods. But such concerns appeared to abate on Monday, thanks to reports that Washington and Beijing are negotiating.
Treasury Secretary Steven Mnuchin said Sunday that he’s “cautiously hopeful” that the world’s two biggest economies will reach an agreement to avoid tariffs, and Chinese Premier Li Keqiang said he believes the two countries “both have the intelligence to resolve the issue,” according to an official statement issued late Monday.
What are strategists saying?
“There were a lot of concerns about trade last week, which have since been put to rest. If China and the U.S. do negotiate their way out of this, that will take a bit weight out of the market. At the same time, we had gotten very oversold and the pessimism was very overdone, so we were poised to rally even before the good news,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co.
“Today we have a bit of momentum from yesterday, but the trick is whether volume returns to the picture. That’s been lacking, and until we see a day where 90% of the trading volume is to the upside, rallies are suspect and I don’t think the momentum will have truly shifted.”
Which economic reports are on tap?
Case-Shiller’s January report on U.S. home prices is due at 9 a.m. Eastern Time, and a March figure for a consumer-confidence index is slated to hit at 10 a.m. Eastern. Economists polled by MarketWatch expect a reading of 131.0 for the confidence gauge, compared with 130.8 the prior month.
Check out: MarketWatch’s Economic Calendar
See: Is the pressure off? Inflation likely to die down in February, but don’t get used to it
On the Federal Reserve front, Atlanta Fed President Raphael Bostic is scheduled to deliver remarks at 11 a.m. Eastern at the 2018 Hope Global Forum, an event in Atlanta focused on inclusive prosperity.
What are other markets doing?
European stocks SXXP, +1.38% are rallying, after Asian markets finished with gains.
Gold futures GCJ8, -0.98% are dropping, while oil futures CLK8, +1.04% and the ICE U.S. Dollar Index DXY, +0.12% are advancing.
Which stocks are in focus?
Shares in McCormick & Co. Inc. MKC, +1.18% are likely to see active trading as the producer of spices and sauces posted quarterly earnings that beat forecasts before the open. Revenue matched expectations, and the company plans to use some tax savings to pay out bonuses and raise wages.
Facebook Inc.’s stock FB, +0.42% could remain in focus a day after the Federal Trade Commission said it was investigating the company’s trade practices. Shares in the social-media giant were up 0.3% in premarket action. They finished 0.4% higher on Monday after early losses disappeared, but they are on track for a March drop of 10%, driven by a firestorm over how the company handled people’s data.
Facebook CEO Mark Zuckerberg won’t appear before U.K. lawmakers who summoned him following a firestorm over how the company handled people’s data.
Red Hat Inc.’s stock RHT, +3.51% gained 5% premarket after the software company posted better-than-expected quarterly results late Monday.
Brookfield Property Partners L.P. BPY, +1.31% said late Monday that it had signed a deal to acquire mall owner GGP Inc. GGP, +0.28% for $9.25 billion in cash, as well as 254 million shares.