Wall Street futures lifted by US-Japan trade deal
NEW YORK : US stock index futures jumped today after President Donald Trump struck a trade deal with Japan, bolstering expectations of more such agreements as the Aug 1 deadline approaches.
The agreement includes lowering tariffs on Japan's auto sector to 15% from the previous 27.5%, while duties on other Japanese goods will also be slashed to 15% from 25%.
At 5.48am, S&P 500 E-minis were up 23.25 points, or 0.37%. Nasdaq 100 E-minis were up 37.25 points, or 0.16%, and Dow E-minis were up 216 points, or 0.48%.
The benchmark S&P 500 closed at a record high yesterday, marking its eighth record close in nearly a month, boosted by easing trade tensions, signs of a resilient US economy and largely upbeat second-quarter earnings.
The blue-chip Dow ended 0.4% higher and was just 1.25% shy of its all-time high.
The tech-heavy Nasdaq, however, was dragged lower by losses in Meta Platforms and Microsoft.
Investors' attention is on earnings from 'Magnificent Seven' group that have helped propel US stocks to all-time highs, with Tesla and Alphabet set to report after the closing bell today.
Renewed optimism about artificial intelligence, coupled with stretched valuations, has led to elevated earnings expectations for these stocks, leaving little room for disappointment.
Shares of Tesla and Alphabet were largely steady in premarket trading.
Texas Instruments sank 11.7% after its quarterly profit forecast failed to impress investors, as it pointed to weaker-than-expected demand for its analog chips from some customers and underscored tariff-related uncertainty.
The earnings also weighed on its peer analog chipmakers, with Analog Devices, NXP Semiconductors and ON Semiconductor falling between 4.7% and 6.3%.
Automaker General Motors became a casualty of the trade war yesterday when it said Trump's tariffs took a US$1.1 billion hit on its quarterly earnings, sending its shares down more than 8%.
Other notable names reporting today include Hasbro, Chipotle and Mattel.
In economic data, existing home sales numbers for June is due on the day.
Tomorrow's weekly jobless claims numbers and S&P Global's flash purchasing managers' index (PMI) data will be closely assessed to gauge economic health in the wake of tariff uncertainties.
Following a mixed set of economic data last week, traders have ruled out an interest rate cut by the Federal Reserve (Fed) next week.
Odds for a September reduction stand at 56.1%, according to the CME FedWatch tool.
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