Market Snapshot: Dow futures rise nearly 300 points as U.S.-China trade reps hold call; investors brace for jobs report

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U.S. stock-index futures were indicating a sharp gain to start Friday trade, after Reuters reported that U.S.-China trade representatives held a phone call to discuss reducing tensions between the global superpowers amid testiness around the COVID-19 pandemic.

That development comes as investors are awaiting a monthly update on the state of the jobs market, from the Labor Department, which will underscore the depth of the impact of the COVID-19 pandemic on the American economy.

How are benchmarks faring?

Futures for the Dow Jones Industrial Average YMM20, +1.21% rose 292 points, or 1.2%, at 24,135, those for the S&P 500 index ESM20, +1.17% gained 34 points, or 1.2%, at 2.914, while Nasdaq-100 futures NQM20, +1.12% advanced 100.25 points, or 1.1%, at 9,208.25.

On Thursday, the Dow DJIA, +0.89% ended 211.25 points, or 0.9%, higher, at 23,875.89, off its intraday high at 24,094.62; the S&P 500 SPX, +1.15% added 32.77 points, or 1.2%, to close at 2,881.19, led by a 2.5% rally in the energy sector SP500.10, +2.47% and a 2.2% climb in financials SP500.40, +2.21%.

The Nasdaq Composite Index COMP, +1.41% wrapped up at 8,979.66, up 125.27 points, or 1.4%, notching a 0.08% year-to-date advance, erasing its losses for 2020.

For the week, the Dow is up 0.6%, the S&P 500 has gained 1.2%, while the Nasdaq has climbed 4.4%, as of Thursday’s close.

What’s driving the market?

Markets have taken a bounce higher after U.S. Trade Negotiator Robert Lighthizer and his Chinese counterpart Liu He and Treasury Secretary Steven Mnuchin held a phone call on Friday, which resulted in the two largest economies in the world agreeing to strengthen macroeconomic and public-health cooperation, Reuters reported late Thursday.

The report signifies a softening of simmering hostilities between Washington and Beijing after President Donald Trump accused China of mishandling the coronavirus outbreak and threatened to quash a bilateral trade pact between the nations.

Trump has said he would impose more tariffs on Chinese goods as punishment for what he says is misleading the world about the novel strain of coronavirus which was first identified in Wuhan, China, in December.

Investors have kept one eye on talks with China and the other on the state of the economy in the aftermath of the pandemic. The monthly report on the employment situation in the U.S. is expected to show 22.1 million jobs were eliminated last month, and the unemployment rate is seen rocketing up to 15.2% from a 50-year low of only 3.5% two months ago.

The report comes after Thursday’s weekly jobless claims revealed that those looking for unemployment benefits increased another 3.2 million in early May — and even more if newly eligible workers who applied through a federal program are counted.

Thus far, the market has blown past the economic weakness amid progress toward reopenings of seized-up economies here and abroad, as restrictions imposed to limit the spread of the deadly pathogen are loosened gradually.

A number of states including Pennsylvania, Rhode Island and California, one of the first states to implement strict lockdown measures, are set to see a limited opening of retail operations.

Beyond jobs data, which comes out at 8:30 a.m. Eastern, investors will be watching for a report on wholesale trade at 9 a.m.

Which stocks are in focus?
  • Dropbox Inc. DBX, +7.59% notched its first quarterly profit since its debut as a publicly traded company in 2018.
  • Uber Technologies UBER, +11.17% reported first-quarter results that revealed weakness in its ride-hailing business but a surge in its food-delivery segment.
  • J.C. Penney Co. Inc. JCP, +1.29% and Sephora reaffirmed their partnership late Thursday, ending a spat after the cosmetics company threatened to pull out of J.C. Penney stores.
  • Inc. STMP, +5.34% shares dove more than 11% in the extended session Thursday after the company reported earnings and revenue that topped consensus estimates.
  • Shares of Herbalife Nutrition Ltd. HLF, +9.37% rose more than 10% in the extended session Thursday after the nutritional supplements company beat Wall Street expectations for its first quarter.
  • Shopify Inc. SHOP, -1.46% said Thursday afternoon that it will sell fresh shares, after the Canadian e-commerce software company roared to record highs this week.
  • Booking Holdings Inc. BKNG, +4.71% declined in the extended session Thursday after the online travel site’s quarterly earnings fell short of Wall Street estimates as the travel industry was hit hard by the COVID-19 pandemic.

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