U.S. stock futures were heading higher Wednesday morning, as China and the U.S. attempted to ease simmering tensions, a day before high-level trade takes are scheduled to commence.
Investors also will watch for minutes later this afternoon from the Fed’s policy gathering committee last month to gather clues on the outlook for interest rates.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YMZ19, +0.72% gained 193 points, or 0.8%, at 26,334, those for the S&P 500 index ESZ19, +0.83% gained 22.90 points to reach 2,915.50, rising 0.5%, while Nasdaq-100 futures NQZ19, +0.99% advanced 70.25 points, or 0.9%, at 7,691.75.
On Tuesday, the Dow DJIA, -1.19% retreated 313.98 points, or 1.2%, to 26,164.04, while the S&P 500 index SPX, -1.56% gave up 45.73 points, or 1.6%, to 2,893.06. The Nasdaq Composite Index COMP, -1.67% retreated 132.52 points, or 1.7%, to finish at 7,865.
What’s driving the stock market?
Markets scored a modest lift after a pair of reports infused some optimism in the trading atmosphere.
A report from Bloomberg News indicated that China was open to a limited tariff resolution with the U.S., while a separate report from the Financial Times (paywall) indicated that China has offered to increase by 50% purchases of agricultural products from U.S. farmers to $50 billion.
The reports come after, the U.S. State Department on Tuesday announced visa restrictions on Chinese government and Communist Party officials who are believed to be involved in abuse of Uighurs and other Muslim minority groups in Xinjiang, China. That announcement came after the U.S. blacklisted some 28 entities for the same alleged violations, prompting Beijing to reportedly consider rolling out its own visa restrictions on U.S. nationals, according to a Reuters.
A representative from China’s Ministry of Commerce said: “We strongly urge the U.S. to immediately stop making irresponsible remarks on the issue of Xinjiang” and demanded that the U.S. “stop interfering” in “China’s internal affairs, and remove relevant Chinese entities from the list of entities as soon as possible.”
Import duties on $250 billion worth of Chinese goods are set to be raised to a rate of 30% from 25% on Oct. 15.
Trade animosities have been weighing on the market, driving stocks lower on Tuesday even after comments from Federal Reserve Chairman Jerome Powell on Tuesday said the central bank believes the current economic expansion can be sustained, and that the Fed intends to expand its balance sheet by purchasing short-term U.S. government debt in exchange for bank reserves, in an attempt to quell recent stress in the market for overnight bank-to-bank lending.
Later in the afternoon, minutes from the rate-setting Federal Open Market Committee’s Sept. 17-18 meeting will be released at 2 p.m. Eastern Time.
Before that release, investors will be watching for further comments from Powell, who is slated to host a round table on labor market conditions and local banking at 11 a.m. with Kansas City Fed President Esther George in Kansas City, one of three dissenters in last month’s meeting.
On the data front, a reading on job openings will be released at 10 a.m. , and a report on wholesale trade will be released at the same time.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.50% rose to 1.551% from 1.532% late Tuesday.
Gold prices edged higher on Wednesday, with December bullion GCZ19, +0.26% up $3.70, or 0.2%, to $1,507.30 an ounce, after settling at $1,503.90 an ounce on Tuesday.
West Texas Intermediate crude for November delivery CLX19, +0.84% gained 49 cents, or 0.9%, to $53.14 a barrel on the New York Mercantile Exchange.
In Asia overnight Wednesday, trade was mixed, with Hong Kong’s Hang Seng Index HSI, -0.81% fell 0.8% to 25,682.81, the China CSI 300 000300, +0.14% rose 0.1% to reach 3,843.24, and Japan’s Nikkei 225 NIK, -0.61% fell 0.2%. The Stoxx Europe 600 SXXP, +0.46% advanced 0.5%.