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Wall Street set for higher start after trade deal assurances

Credit: REUTERS/Lucas Jackson

Wall Street was set to extend its three-day rally at the open on Tuesday as officials from the United States and China pledged their commitment to their Phase One trade deal, adding to cheer over progress in developing treatments for COVID-19.

By Medha Singh and Devik Jain

Aug 25 (Reuters) - Wall Street was set to extend its three-day rally at the open on Tuesday as officials from the United States and China pledged their commitment to their Phase One trade deal, adding to cheer over progress in developing treatments for COVID-19.

The news eased some concerns that the deal could be on shaky ground, helping stocks grind higher as investors await the centerpiece event of the week - an annual conference of U.S. central bankers where Federal Reserve Chairman Jerome Powell is scheduled to speak.

"Both countries believe it's in their interest to cut a deal and are making noise that they don't want to let political concerns to interfere with the trade and also disrupt the world economy," said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.

"There are more and more data points on the COVID vaccine, which continue to be mostly positive, supporting long term momentum in the market."

The S&P 500 and the Nasdaq logged new closing highs on Monday after the FDA approved the emergency use of blood plasma as a treatment for COVID-19. The benchmark index surpassed its pre-pandemic high last week even as recent economic indicators signaled a bumpy recovery from the virus-led downturn.

Later in the day, a survey from the Conference Board is expected to show U.S. consumer confidence improved slightly in August after falling more than expected in July amid a flare up in coronavirus cases.

Among stocks, Salesforce.com Inc CRM.N, Amgen Inc AMGN.O and Honeywell International Inc HON.N climbed between 2.5% and 4.1% premarket on news they would join the blue-chip Dow Jones Industrial Average index .DJIA on Aug. 31.

Cloud computing heavyweight Salesforce.com is also expected to report second-quarter results after markets close.

The three companies will replace Exxon Mobil Corp XOM.N, Pfizer Inc PFE.N and Raytheon Technologies Corp RTX.N, which were down between 1.3% and 1.6%.

At 8:10 a.m. ET, Dow e-minis 1YMcv1 were up 206 points, or 0.73%, S&P 500 e-minis EScv1 were up 16.25 points, or 0.47% and Nasdaq 100 e-minis NQcv1 were down 7.25 points, or 0.06%.

Medtronic MDT.N rose 2.8% after the company said demand for medical devices was improving as elective surgeries picked up pace while it posted a 44% decline in first-quarter profit.

J.M. Smucker Co SJM.N rose 3.8% after the Folgers coffee maker raised its forecast for fiscal 2021 adjusted profit.

Consumer electronics retailer Best Buy Co Inc BBY.N dropped 3.3% as it warned sales growth may slow in the coming weeks due.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty)

((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6749 1130; Twitter: https://twitter.com/medhasinghs))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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