Trade Talks Optimism Triggers Buying Interest on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to add to the gains posted in the previous session.

The markets may continue to benefit from optimism about a potential U.S.-China trade deal ahead of high-level negotiations next week.

Recent comments from Trump officials downplaying reports about efforts to restrict U.S. investment in China have helped to ease concerns about trade tensions.

Buying interest may be somewhat subdued, however, as disappointing manufacturing data from overseas has added to worries about the global economy.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on U.S. manufacturing activity in the month of September.

After coming under pressure over the course of last Friday?s session, stocks moved back to the upside during trading on Monday. The major averages all climbed into positive territory, although buying interest was somewhat subdued.

The major averages pulled back off their best levels late in the session but held on to gains. The Dow rose 96.58 points or 0.4 percent to 26,916.83, the Nasdaq advanced 59.71 points or 0.8 percent to 7,999.34 and the S&P 500 climbed 14.95 points or 0.5 percent to 2,976.74.

The rebound on Wall Street came after a Treasury Department spokeswoman denied reports the Trump administration is considering delisting Chinese companies from U.S. stock exchanges.

“The administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time. We welcome investment in the United States,” Treasury spokeswoman Monica Crowley said in a statement.

Crowley’s statement comes on the heels of reports suggesting the administration is contemplating ways to curb U.S. investments in China.

White House trade adviser Peter Navarro attacked the media reports in an interview with CNBC on Monday, claiming “over half” of a Bloomberg report about potential restrictions was “highly inaccurate or simply flat-out false.”

“This story was just so full of inaccuracies and in terms of the truth of the matter, what the Treasury said I think was accurate,” Navarro said.

Better than expected manufacturing data out of China also tempered some of the recent concerns about the impact of the U.S.-China trade war.

Meanwhile, MNI Indicators released a report showing Chicago-area business activity unexpectedly returned to contraction in the month of September.

MNI Indicators said its Chicago business barometer slumped to 47.1 in September after rebounding to 50.4 in August. A reading below 50 indicates a contraction in Chicago-area business activity.

The index indicated a contraction for the third time in four months, while economists had expected a much more modest decrease to a reading of 50.2.

MNI Indicators said its reading on prices at the factory gate rose 4.1 points to 57.7 in third quarter, with anecdotal evidence pointing to tariffs affecting prices and business activity.

Despite the advance by the broader markets, most of the major sectors finished the session showing only modest moves.

Semiconductor stocks showed a notable move to the upside, however, with the Philadelphia Semiconductor Index climbing by 1 percent.

Housing, software, chemical and healthcare stocks also saw some strength on the day, while gold stocks fell sharply along with the price of the precious metal.

With gold for December delivery plummeting $33.50 to $1,472.90 an ounce, the NYSE Arca Gold Bugs Index plunged by 3.5 percent to a two-month closing low.