Wall Street was set for a higher open on Tuesday, with stock futures building on the prior day��s gains as traders looked past the heightened U.S.-China trade tensions for now.
Trading volumes were expected to be lower than normal because of the Fourth of July holiday on Wednesday.
What are markets doing?
Futures for the Dow Jones Industrial Average YMU8, +0.45% �climbed 43 points, or 0.2%, to 24,332, while those for the S&P 500 index ESU8, +0.33% �gained 4.70 points, or 0.2%, to 2,723. Futures for the Nasdaq-100 index NQU8, +0.38% �put on 18.25 points, or 0.3%, to 7,134.50.
All three U.S. benchmarks on Monday managed to shake off early losses and end in positive territory. Tech shares in particular rallied, helping the Nasdaq Composite Index COMP, +0.76% �end 0.8% higher, while the Dow DJIA, +0.15% �gained 0.2% and the S&P 500 SPX, +0.31% �put on 0.3%.
What is driving the market?
The premarket gains were seen as a continuation of Monday��s trading mood, where better-than-expected U.S. manufacturing data drove optimism and briefly overshadowed concerns about a potential trade war.
The uncertainty over trade policy, however, was still hanging over markets, ahead of the U.S.��s planned tariffs on up to $50 billion on Chinese products set to come into effect on Friday. The Trump administration was seen as keeping the U.S.-China tensions alive after late Monday saying it seeks to block China Mobile from operating in the U.S. market. The White House cited ��national security interests�� as the reason for refusing China Mobile access to the U.S.
As trade tensions persist, analysts were worried China is launching a currency war to fight back against the U.S. The Chinese yuan USDCNY, -0.2685% �has depreciated about 3.5% against the dollar over the past month, but rose slightly on Tuesday. The dollar bought 6.6523 yuan, compared with 6.6673 late Monday in New York.
Meanwhile, in Europe, traders welcomed a last-minute deal on immigration in Germany. With the agreement in place, Chancellor Angela Merkel��s fragile coalition government stepped back from a full-blown crisis that could have cost Merkel her position as German leader.
What are strategists saying?
��Equities in Asia are deep in the red following the continued depreciation of the Chinese yuan, while concerns on whether the U.S. trade levies threaten China��s growth send regional bourses lower. The European and U.S. futures, however, paint a different picture, with almost all the markets trending towards a positive opening bell,�� said Konstantinos Anthis, head of research at ADSS, in a note.
��Whether this change in bias is a reaction to the resolution in German politics or just a short-term bounce remains to be seen. Having said that and given that most indices are trading just above key support levels, vigilance is advised as a quick change in sentiment could threaten these lows and clear the path for more losses,�� he added.
What are other markets doing?
Asian stock markets closed mixed, with the Hong Kong Hang Seng Index HSI, -1.41% �and Japan��s Nikkei 225 Index NIK, -0.12% �ending lower, but the Shanghai Composite Index SHCOMP, +0.41% �finishing with a 0.4% gain. Equities in Europe were higher almost across the board.
The dollar DXY, -0.19% �declined against most other major currencies, while gold GCQ8, +0.42% �moved higher. Oil CLQ8, +1.07% �prices were also rising, as traders assessed the Trump administration��s softening of its stance on Iran sanctions.
Which stocks are in focus?
Shares of Micronet Enertec Technologies Inc. MICT, +7.89% �rallied 67% premarket after news late Monday that BNN Technology last month bought a 14.89% stake in the aerospace and defense company. The two companies also said they are planning a series of other strategic transactions.
Tesla Inc. TSLA, -2.30% �slipped 0.3% ahead of the bell, set to add to a 2.3% drop from Monday when The Wall Street Journal reported that the company��s top engineer Doug Field is leaving.
What��s on the economic calendar?
Factory orders for May are due at 10 a.m. Eastern Time, while monthly auto sales figures from June are expected to trickle out through the day.
There were no Federal Reserve speakers on the docket Tuesday.
Sara Sjolin
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
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Comment Related Topics U.S. Stocks Markets NY Stock Exchange NASDAQ Quote References YMU8 +110.00 +0.45% ESU8 +9.00 +0.33% NQU8 +27.00 +0.38% COMP +57.38 +0.76% DJIA +35.77 +0.15% SPX +8.34 +0.31% USDCNY -0.0179 -0.2685% HSI -409.54 -1.41% NIK -26.39 -0.12% SHCOMP +11.33 +0.41% DXY -0.18 -0.19% GCQ8 +5.20 +0.42% CLQ8 +0.79 +1.07% MICT +0.09 +7.89% TSLA -7.88 -2.30% Show all references MarketWatch Partner Center Most Popular
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