FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City, U.S., August 26, 2019. REUTERS/Andrew Kelly
August 29, 2019
By Akanksha Rana
(Reuters) – U.S. stock index futures jumped about 1% on Thursday as China sounded upbeat about its trade talks with the United States, calming investors unnerved by the prospect of a recession.
China’s commerce ministry said both sides are discussing the next round of talks scheduled in September and hoped U.S. officials could cancel the planned additional tariffs to avoid an escalation, boosting sentiment and driving global stocks higher.
Trade-sensitive stocks such as Apple Inc <AAPL.O> and Boeing Co <BA.N> rose more than 1% in premarket trading.
Chipmakers, which draw a large part of their revenue from China also gained, with Intel Corp <INTC.O>, Qualcomm Inc <QCOM.O>, Advanced Micro Devices Inc <AMD.O> and Nvidia Corp <NVDA.O> up between 0.9% and 2.3%.
The Trump administration on Wednesday made official its additional 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15, prompting several hundreds of U.S. companies to warn of price hikes.
Shares of Best Buy Co Inc <BBY.N>, the biggest U.S. consumer electronics retailer, dropped 5.8%, after forecasting annual same-store sales below analysts’ estimates, citing the new U.S. tariffs set to be imposed on Chinese imports.
Wall Street’s main indexes are on course to record their worst monthly performance since a selloff in May, spurred by worries that tit-for-tat tariffs will drive the global economy into a recession. Those fears came to the fore after the U.S. yield curve inversion deepened earlier this week to levels not seen since 2007.
Data from the U.S. Commerce Department in its second estimate, due at 08:30 a.m. ET (1230 GMT) is likely to show that gross domestic product increased 2% in the second quarter, after showing 2.1% growth in its earlier estimate.
Separately, data from the Labor Department, which is also due at 08:30 a.m. ET, is likely to show that initial jobless claims rose to 215,000 from 209,000 for the week ended Aug. 24.
At 7:11 a.m. ET, Dow e-minis <1YMcv1> were up 260 points, or 1%. S&P 500 e-minis <EScv1> were up 27 points, or 0.93% and Nasdaq 100 e-minis <NQcv1> were up 93.25 points, or 1.23%.
Among other stocks, Box Inc <BOX.N> tumbled 10% premarket as investors were disappointed after the cloud content management platform provider reiterated its full-year earnings outlook.
Dollar General Corp <DG.N> jumped 6.4% after the discount retailer beat analysts’ estimates for quarterly same-store sales.
(Reporting by Akanksha Rana and Sruthi Shankar in Bengaluru)
