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U.S. stock index futures rose Monday to start off the week amid optimism around U.S.-China trade relations.
Around 8:12 a.m. ET, Dow Jones Industrial Average futures were up by 101 points, indicating a gain of 91 points at the open. S&P 500 and Nasdaq 100 futures also pointed to solid gains to start off the session.
Investors are monitoring U.S.-China trade as a Chinese delegation is due to travel to Washington, D.C., Monday for the signing of the so-called phase one trade deal on Wednesday. The deal is expected to lower tariffs on some Chinese-made goods, as well as increase China’s purchases of U.S. agricultural products.
The deal underwent a lengthy translation in recent weeks, but Treasury Secretary Steven Mnuchin said China’s commitments remained unchanged after the process. Mnuchin noted on Sunday that this is “a very, very extensive agreement.”
According to a Wall Street Journal report, the U.S. and China have agreed to hold semiannual talks to resolve disputes and push for reforms. China and the U.S. have been locked in a trade war for about two years, stoking concerns over corporate profits and global economic growth.
To be sure, The South China Morning Post reported the Chinese government said the trade war is “not over yet,” adding the signing of Wednesday’s agreement is just the “first round of a game.”
Wall Street is coming off a solid performance last week, with the major indexes posting strong gains and reaching all-time highs. However, stocks came under slight pressure on Friday on the back of disappointing employment data. The U.S. economy added 145,000 jobs in December, lower than what economists polled by Dow Jones had estimated at 160,000 jobs.
Tesla shares rose 1.9% in the premarket after an analyst at Oppenheimer hiked his price target on the stock to $612 per share from $385 per share. The analyst said Tesla’s “risk tolerance … and larger ambition than peers are beginning to pose an existential threat to transportation companies that are unable or unwilling to innovate at a faster pace.”