Dow futures up 200 points as trade tensions show signs of cooling

U.S. stocks were poised to rebound on Monday, after logging their worst weekly performance in more than two years, with gains spurred by reports that the U.S. and China are in behind-the-scenes talks to avert a global trade war.

A handful of Federal Reserve speakers may capture attention as well, as a holiday-shortened week of trading kicks off.

What are the main benchmarks doing?

Dow Jones Industrial Average futures
YMM8, +0.89%
rose 202 points, or 0.9%, to 23,816, while S&P 500 futures
ESM8, +0.99%
gained 25.70 points, or 0.9%, to 2,623. Nasdaq-100 futures surged 83 points, or 1.3%, to 6,638.

Fears of a trade war hung over markets on Friday, driving the Dow
DJIA, -1.77%
to its lowest close of 2018. The index shed 424.69 points, or 1.8%, to reach 23,533.20 and took out its previous closing low, set in early February.

Sliding more than 1,400 points, the Dow tumbled 5.7% for the week, while the S&P 500
SPX, -2.10%
and Nasdaq
COMP, -2.43%
indexes lost 6% and 6.5%, respectively. All three indexes suffered their worst weekly returns since January 2016, when fears of a global economic rout dogged sentiment.

Whats driving markets?

Global trade tensions are expected to remain front and center for investors in what will be a holiday-shortened week, with markets scheduled to close in observance of Good Friday.

But equity traders seem to be taking some cheer in reports that China and the U.S. have been talking behind the scenes, in a bid to help stave off a trade war.

Those talks, led by U.S. Treasury Secretary Steven Mnuchin and Liu He, Chinas vice premier for economic policy, are aimed at providing better access to Chinese markets for U.S. companies. Tensions ratcheted up last week after the Trump administration declared tariffs on certain Chinese goods and China fired back with its own trade-related clampdown.

Mnuchin told Fox News on Sunday that he was cautiously hopeful an agreement can be reached with China.

Meanwhile, the U.S. and South Korea have reached a deal that will give the Asian country a permanent exemption from trade tariffs.

Read: The Dow may be at the mercy of politicians until earnings season

What is on the economic docket?

Its a quiet day for data reports, with just the Chicago Fed national activity index for February due for release at 8:30 a.m. Eastern Time. But the week will also deliver a fresh look at inflation via an upate on the PCE index, the Federal Reserves preferred gauge, on Thursday.

Read: Is the pressure off? Inflation likely to die down in February, but dont get used to it

On Monday, New York Federal Reserve President William Dudley is scheduled to speak on regulatory reform in Washington, D.C. at 12:30 p.m. Eastern. Fed Vice Chair Randal Quarles is due to speak on consumer protection and small business at a forum in Atlanta at 7:10 p.m. Eastern.

Read: John Williams may be named New York Fed president: report

What are other markets doing?

European equities
SXXP, +0.18%
traded mostly higher. Asian markets finished mixed, as losses eased toward the close, and the Korean KOSPI Composite Index ended 0.5% higher after news of the trade deal.

The ICE U.S. Dollar Index
DXY, -0.21%
eased slightly, while gold
GCJ8, -0.07%
dipped 0.2% to $1,346.70 an ounce.

Oil futures
CLK8, -0.43%
pulled back 0.5% to $65.55 a barrel.

Related Topics U.S. Stocks Markets NY Stock Exchange NASDAQ

Quote References YMM8 +209.00 +0.89% ESM8 +25.75 +0.99% DJIA -424.69 -1.77% SPX -55.43 -2.10% COMP -174.01 -2.43% SXXP +0.67 +0.18% DXY -0.19 -0.21% GCJ8 -1.00 -0.07% CLK8 -0.28 -0.43% Show all references
MarketWatch Partner Center
Most Popular How the new tax law creates a perfect storm for Roth IRA conversions This is the best way to shop Toys R Us liquidation sales U.S. stock futures point to rally over cooling trade tensions Asian markets stem early losses as trade-war fears ease slightly The $80 billion fitness industry sees huge growth in this demographic Barbara Kollmeyer

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

Leave a Reply

Your email address will not be published. Required fields are marked *