US stock futures signal a modestly higher start for Wall Street on Tuesday as trade relations between the US and China thaw and retailers report results.
S&P 500 futures were up 0.2 per cent to 2,738.25, Dow futures were up 0.2 per cent to 25,060, while Nasdaq 100 futures were up 0.4 per cent to 6,944.50. The advance follows a rebound on Monday that saw the Dow rise above 25,000 for the first time since March.
US auto shares were higher in pre-market trade after China said it would cut the import duty on passenger cars to 15 per cent on July 1, from 25 per cent. Ford shares were up 1 per cent, Tesla shares were up 1 per cent, Fiat Chrysler shares were up 2.6 per cent, while GM shares were up nearly 1 per cent too.
China’s concession comes as relations between Washington and Beijing are mellowing, with US Treasury Secretary Steven Mnuchin noting over the weekend that the trade war has been put on “hold”. The US is currently working with China to save telecoms group ZTE from US sanctions.
Elsewhere, the yield on the US 10-year was up 1.5 basis points to 3.074 per cent, while that on the 2-year was up 1.3 basis points to 2.578 per cent. Yields move inversely to prices. Meanwhile, the dollar index, a gauge of the buck against a basket of weighted peers, was down 0.3 per cent to 93.43.
The economic data calendar in the US remains light though markets are eyeing fresh updates from retailers. Kohl’s issued a rosier earnings outlook alongside upbeat earnings earlier this morning sending its shares higher in pre-market trade. Markets are also readying for the minutes of the Federal Reserve’s May monetary policy meeting, which will be released on Wednesday.
“The [dollar] is beginning to exhibit signs of rally fatigue,” Mazen Issa, strategist at TD Securities said. “The upcoming Fed minutes are likely to contain dovish undertones and could be a tipping point for the [dollar].”
Tuesday’s market moves also follow cautious trade in Europe as major bourses edge up an Italian government yields ease back as investors continue to Italian politics.
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