Wall St set to open higher on US-China trade hopes

US stocks index futures pointed to a higher open for Wall Street on Friday, as investors took comfort from signals that the United States and China will resume trade talks.

The three main indexes are on track to wrap up the week with the biggest gains since June, after coming under immense selling pressure for much of the month due to escalating trade tensions and fears of a looming recession.

The benchmark S&P 500 index has fallen 3,4 percent from its record high hit in late July. Markets will be shut for the Labour Day holiday today.

“It is a continuation of what we saw yesterday (Thursday) and there is optimism that there’s going to be some sort of progress, that seems to be the biggest factor,” said Scott Brown, chief economist at Raymond James in St Petersburg, Florida.

China’s Foreign Ministry said trade negotiating teams from Washington and Beijing are maintaining effective communication, a day after both sides discussed the next round of in-person negotiations in September. Shares of trade-sensitive companies including Apple Inc and Caterpillar Inc were up nearly 1 percent premarket.

Investors were also bracing for a new round of US tariffs on some Chinese goods that were set to come into effect yesterday.

“The market believes that there will be some type of negotiation, but there is real danger this trade conflict is going to last, especially with the magnitude of September tariffs,” added Brown.

Further allaying fears of a recession was data from the Commerce Department which showed US consumer spending increased strongly in July.

However, the report also suggested that the pace of growth in consumption is unlikely to be sustained amid tepid income gains. The inflation data will be followed by the monthly jobs report and manufacturing numbers next week that would offer more clarity on the chances of another interest rate cut.

At 8:44 am. ET, Dow e-minis were up 146 points, or 0,55 percent. S&P 500 e-minis were up 17 points, or 0.58 percent and Nasdaq 100 e-minis were up 45,75 points, or 0,59 percent.

Ulta Beauty Inc fell 25 percent after the cosmetics company cut its full-year profit forecast. Shares of Estee Lauder Cos Inc, elf. Beauty Inc and Coty Inc dropped between 0,5 percent and 1,3 percent.

Dell Technologies Inc jumped 8,4 percent as the PC maker beat analysts’ estimates for profit, aided by higher demand for desktops as well as a focus on more profitable contracts within its server unit in China.

US food company Campbell Soup Co rose 3,1 percent after it reported better-than-expected fourth-quarter profit. Marvell Technology Group Ltd fell 3,3 percent after the chip-maker forecast third-quarter revenue below estimates.

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