Market Snapshot: Stock-index futures point higher as U.S., China reaffirm commitment to trade deal

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Stock-index futures pointed to more gains for Wall Street on Tuesday after U.S. and Chinese officials reaffirmed their commitment to a so-called phase one trade deal.

What are major benchmarks doing?

Futures on the Dow Jones Industrial Average YM00, +0.71% rose 200 points, or 0.7%, to 28,439, while S&P 500 futures ES00, +0.44% ES00, +0.44% gained 14.75 points, or 0.4%, to trade at 3,442.25. Nasdaq-100 futures NQ00, -0.10% were up 3 points, or less than 0.1%, at 11,639.25.

The Dow DJIA, +1.35% on Monday rose 378.13 points, or 1.4%, to finish at 28,308.46, leaving it 4.1% away from its record close set on Feb. 12. The S&P 500 SPX, +1.00% pushed further into uncharted territory, rising 34.12 points, or 1%, to close at a record 3,431.28. The Nasdaq Composite COMP, +0.60% also ended at a record, rising 67.92 points, or 0.6% to 11,379.72.

What’s driving the market?

Analysts tied a positive tone across global equity markets in part to remarks following a phone call between U.S. and Chinese officials over the status of the partial trade agreement despite rising tensions over Beijing’s treatment of Hong Kong and other issues.

China described the call as a “constructive” discussion between Vice Premier Liu He, the country’s top negotiator, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. The U.S. said both sides “see progress and are committed to taking the steps necessary to ensure the success of the agreement.” The call came after plans for a discussion earlier this month were postponed.

“Given the exchanges between the two countries recently have been negative, any small bit of positivity is seen as a big step forward, even when it isn’t,” said David Madden, analyst at CMC Markets, in a note. “The Chinese government are still well behind on their commitments to purchase US goods, but to be fair, some of that is down to the pandemic.”

Meanwhile, a shake-up of the Dow Jones Industrial Average is in store at the end of the month. S&P Dow Jones Indices late Monday announced that customer relationship management software company Inc. CRM, +0.44% would replace oil giant Exxon Mobil Corp. XOM, +2.95%, biotech drugmaker Amgen Inc. AMGN, -0.87% will replace pharmaceutical company Pfizer Inc. PFE, -0.10%, and software-and-industrial conglomerate Honeywell International Inc. HON, +1.18% will replace defense contractor Raytheon Technologies Corp. RTX, +2.67%. S&P Dow Jones Indices said the move was prompted by Apple Inc.’s AAPL, +1.19% coming 4-for-1 stock split, which will reduce the blue-chip index’s technology weighting.

The U.S. economic calendar for Tuesday includes the June reading for the Case-Shiller home price index at 9 a.m. Eastern. A consumer-confidence index reading is due at 10 a.m., along with data on July new-home sales.

Which companies are in focus?
  • Shares of Inc. were up 2.6% in premarket action, following the announcement of its pending addition to the Dow, while shares of Amgen rose 3.8% and Honeywell shares added 3.5%. ExxonMobil shares were off 1.9%, while Pfizer fell 1.2% and Raytheon gave up 2.4%.
  • Shares of Palo Alto Networks Inc. PANW, -0.83% TK after the company delivered results and an outlook that topped Wall Street forecasts after Monday’s closing bell. The company also continued its acquisition spree, saying it would buy incident-response company Crypsis Group for $265 million in cash to support its Cortex XDR platform.