NEW YORK: US stocks on Thursday looked set to add to late-session gains from a day earlier as concerns over a trade war between the United States and China eased on signs that the world’s two biggest economies were open to negotiations on tariffs.
Technology stocks, which have taken a beating in the past three weeks, were higher in premarket trading. Facebook, Amazon, Alphabet, Netflix – collectively known as the “FANG” group – were up between 1.1 percent and 3.8 percent.
“US equity markets are poised to open in the green as investors temporarily shrug off trade war fears,” Craig Erlam, senior market analyst at Oanda said in a note.
The Dow Jones Industrial Average dropped about 500 points on Wednesday after a proposed US tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing. China hit back with equal measure on US goods such as soybeans, autos, chemicals and some types of aircraft.
Shares of big US manufacturers, grain traders and chipmakers were hit hard until mid-day.
But sentiment reversed after President Donald Trump’s top economic adviser Larry Kudlow said the administration was involved in a “negotiation” with China rather than a trade war.
“The bounce on Wednesday was really quite impressive, especially as there was not much of a catalyst for the turnaround given that neither the US or China is backing down on tariffs and negotiations were always going to take place in the background,” Erlam wrote.
Also, the effective date of China’s move depended on when the US action took effect, providing room for maneuver.
Economic data on Thursday showed that the US trade deficit increased to a near 9-1/2-year high in February, but the shortfall with China narrowed sharply.
While exports to China were unchanged in February, imports from the country declined 14.7 percent.
At 8:35 a.m. ET, Dow e-minis were up 79 points, or 0.33 percent, with 65,148 contracts changing hands.
S&P 500 e-minis were up 12.75 points, or 0.48 percent, with 224,988 contracts traded.
Nasdaq 100 e-minis were up 50.5 points, or 0.77 percent, on volume of 80,483 contracts.
Facebook shares were up 3.7 percent after Chief Executive Mark Zuckerberg said the company had not seen “any meaningful impact” on usage or ad sales since the scandal.
Wells Fargo rose 1 percent and Citigroup gained 1.5 percent following upgrades by UBS.
Advanced Micro Devices jumped 2.8 percent after Stifel upgraded to “buy”, while Micron Technology fell 1.5 percent after UBS started with a “sell” rating.
Source: Brecorder
