US pre-open: Stocks to rise as China-US tensions ease; deal news in focus
US futures pointed to a positive open on Wall Street on Monday as investors welcomed an easing of tensions between the US and China, with deal news in focus.
At 1230 BST, Dow Jones Industrial Average futures were up 0.9%, while S&P 500 and Nasdaq futures were 0.6% and 0.7% firmer, respectively.
Investors breathed a sigh of relief after US Treasury Secretary Steve Mnuchin said over the weekend that the US would hold off from imposing tariffs on China, which had originally sparked fears of a trade war between the two.
Mnuchin said that a trade war was "on hold" as both countries agree to work on a wider trade agreement.
Washington has lifted plans to impose tariffs on up to $150bn of Chinese imports in response to a promise from China to "significantly increase" its purchases of US farm and energy exports.
Rabobank said: "The deal may have created a short-term lift in market sentiment but beyond the headlines there is still a significant amount of ground to cover. Talks are set to continue over the summer and issues regarding US intellectual property rights and Beijing’s subsidies of key industries are likely to feature strongly."
London Capital Group analyst Jasper Lawler said: "This is by no means the end of the matter, especially given the huge gap that remains between the two sides, as highlighted by the lack of any real detail in the announcement. However, this was the encouraging start to talks that traders were after."
The Dollar Index was up 0.4% to 94.012, hitting it best level since late 2017 on the back of the news. Against the pound, the greenback was up 0.5% to 0.7458 and versus the euro it was 0.2% firmer at 0.8512. The dollar was 0.5% higher against the yen at 111.31.
Deal news was in focus, with General Electric in the black in pre-market trade as it agreed to sell GE Transportation to Wabtec in a deal valued at $11.1bn.
Meanwhile, IT services provider Roper Technologies said it was buying software company PowerPlan in an all-cash deal valued at $1.1bn, while Fifth Third Bancorp has agreed to buy Chicago's MB Financial in a deal valued at $4.7bn.
Elsewhere, shares of electric car maker Tesla were likely to be active after chief executive Elon Musk announced a new high-performance model 3 at $78,000.
On the data front, the Chicago Fed national activity index is at 1330 BST.