U.S. stock futures climbed on Monday as investors cheered reports that a Sino-American trade deal was moving closer, with the two sides in the final stages of an agreement.
How did benchmarks fare?
Dow Jones Industrial Average futures YMH9, +0.34% rose 86 points, or 0.3%, to 26,118, while S&P 500 futures ESH9, +0.30% gained 8 points, or 0.3%, to 2,813. Nasdaq-100 futures NQH9, +0.54% gained 33.25 points, or 0.5%, to 7,189
On Friday, the S&P 500 index SPX, +0.69% rose 0.7% to 2,803.69, closing above the 2,800 level for the first time since Nov. 8. The Dow industrials DJIA, +0.43% closed up 110.32 points, or 0.4%, to 26,026.32, while Nasdaq Composite Index COMP, +0.83% advanced 0.8% to 7,595.35.
Last week, the S&P 500 gained 0.4% and the Nasdaq added 0.9%. The Dow, meanwhile, shed about 0.1% to snap its nine-week winning streak, the longest since May 1995.
Read: Stocks may roar to start the month, but end March with a whimper, analysts say
What’s driving the market?
Citing sources, a report in The Wall Street Journal said Washington and Beijing could reach a trade deal as soon as this month. Reports said the pact would end most U.S. tariffs levied against China in exchange for the latter following up on its own promises to allow in more U.S. exports, among other measures.
While the deal has yet to be finalized and hurdles remain on both sides, a formal agreement could be reached at a summit — likely around March 27 — between President Donald Trump and Chinese President Xi Jinping, those sources said. Trade optimism has played a key role in driving gains for stocks this year.
China’s economy will also be in focus this week with the National People’s Congress due to kick off and officials expected to announce growth targets.
Investors appeared ready to overlook some mixed signs on the U.S. economic front, with a key manufacturing gauge on Friday marking the slowest pace of growth since the election of President Trump in November 2016. The only data on tap for Monday is construction spending, but investors will get an important update on labor market on Friday, with February jobs numbers.
Read: All the bad news on the economy can’t overshadow where the real strength lies
Trump took a fresh swipe at Federal Reserve Chairman Jerome Powell and a strong dollar on Saturday, in a lengthy speech at the Conservative Political Action Conference in National Harbor, Md.
“We have a gentleman that likes a very strong dollar at the Fed... I want a strong dollar, but I want a dollar that is great for our country not a dollar that is so strong that it is prohibitive for us to be dealing with other nations,” said Trump, according to reports. He also lashed out at the media, Democrats, environmentalists and special counsel Robert Mueller’s Russia probe.
What are strategists saying?
“This morning’s news reinforces the view that from a short-term macroeconomic perspective, the U.S.-China trade deal (or not) is the only game in town,” said Jeffrey Halley, senior market analyst at OANDA, in a note to clients.
“It is, however, a busy week globally on the data front. We have a plethora of central bank rate decisions, starting with the Reserve Bank of Australia on Tuesday, Bank of Canada on Wednesday and the European Central Bank on Thursday,” added Halley.
Which stocks are in focus?
Shares of Kraft Heinz Co. KHC, -2.38% were up 2.2% in premarket trade Monday morning, after Morgan Stanley upgraded the stock to equal weight from underweight. The stock is down 24.8% year-to-date after the firm wrote down the value of its Kraft and Oscar Mayer brands by $15.4 billion in February.
Bed Bath and Beyond BBBY, -0.24% stock is in focus Monday, after Barclay’s downgraded the stock from underweight to equal weight. Shares are down 2.9% in premarket trade.
How were other markets trading?
Stocks in Asia surged on trade hopes, with China’s Shanghai Composite Index SHCOMP, +1.12% surging 1.1% to 3,027.58, its highest level in nine months.
European equities also opened with gains; the Stoxx Europe 600 SXXP, +0.54% gained 0.5%.
Gold prices GCJ9, -0.83% took a hit as investors sought out perceived riskier assets such as stocks. The price of oil CLJ9, +0.88% was rising 0.8%, while the U.S. dollar DXY, +0.27% was modestly higher.
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