NEW YORK: Wall Street’s three main indexes opened at record highs on Monday, buoyed by hopes of a US-China trade deal and an improving domestic economy.
Washington and Beijing said on Friday they had made progress in defusing an economically damaging trade war, with US officials indicating that a deal could be signed this month.
Adding to the optimism, Commerce Secretary Wilbur Ross said on Sunday licenses for US companies to sell components to China’s Huawei Technologies Co. would come “very shortly” and that there was no reason a trade deal could not be on track to be signed this month.
“There is growing enthusiasm over a trade deal, as progress is being made in these talks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Investors are betting that some sort of a deal is on its way, not a whole deal but something that will at least avoid a recession. And markets can live with that,” he added. Trade sensitive chipmakers including Intel Corp, Micron Technology and Nvidia Corp. rose between 0.7 percent and 2 percent in premarket trading.
US-listed Chinese stocks such as online games and media provider NetEase Inc, Internet search provider Baidu Inc. and e-commerce firm JD.Com were also up between 1.6 percent and 3.6 percent.
The S&P 500 and Nasdaq index hit record highs in the previous session after data showed US jobs growth slowed less than expected in October, easing concerns about the fallout of the trade war on domestic economy.
A robust third quarter earnings season has also added to an upbeat mood, with about 76 percent of the 356 S&P 500 companies that have reported results so far beating profit expectations, according to Refinitiv data.
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US-listed Chinese stocks such as online games and media provider NetEase Inc, Internet search provider Baidu Inc. and e-commerce firm JD.Com were also up between 1.6 percent and 3.6 percent.
Companies such as Uber Technologies Inc, Qualcomm Inc, Walt Disney Co. and CVS Health Corp. are set to report results this week.
Fresh economic data is expected to show US factory orders falling 0.5 percent in September compared to a 0.1 percent drop in August.
Dow e-minis were up 178 points, or 0.65 percent. S&P 500 e-minis were up 19.25 points, or 0.63 percent and Nasdaq 100 e-minis were up 65.25 points, or 0.8 percent.
Under Armor Inc. slid 14.6 percent as it lowered its full-year revenue forecast for a second straight time, a day after it confirmed a federal probe related to its accounting practices.
McDonald’s Corp. fell 1.7 percent after the fast-food giant dismissed CEO Steve Easterbrook over a recent consensual relationship with an employee, which the board determined violated company policy.
US-listed shares of Tesla rival Nio Inc. jumped 9.2 percent as it reported a 25 percent jump in vehicle deliveries in October. With nearly 363,000 shares traded before the bell, it was among the most actively-traded US stocks.
