(Reuters) – Wall Street’s main indexes were set to open slightly higher on Monday, with investors pinning their hopes on a meeting between Presidents Donald Trump and Xi Jinping later this week to de-escalate a trade war that is damaging the global economy.
FILE PHOTO: Traders work on the main trading floor after the opening bell at New York Stock Exchange (NYSE) in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid/File Photo
The S&P 500 index hit a record high last week, boosted by rising expectations that the Federal Reserve would cut interest rates and optimism over a revival in trade talks between the United States and China.
“Markets are generally optimistic about the fact that both sides are continuing to meet, talk, discuss and debate tariffs, and so there’s still the potential for progress,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
“Don’t think markets are expecting a deal, but at least as long as there’s dialogue, there’s hope for progress.”
Shares of trade-sensitive Boeing Co were up 0.3% in premarket trading, while chip companies, which have a major exposure to China, were also trading higher.
Investors were also hopeful that the Federal Reserve was ready to battle growing risks to global and domestic growth from the long-drawn trade conflict, after the U.S. central bank signaled a potential interest rate cut later this year.
At 8:38 a.m. ET, Dow e-minis were up 69 points, or 0.26%. S&P 500 e-minis were up 6.75 points, or 0.23% and Nasdaq 100 e-minis were up 23.75 points, or 0.31%.
However, gains were kept in check by rising tensions between the United States and Iran, after Tehran shot down an American drone last week.
Trump said on Sunday he was not seeking war with Iran after a senior Iranian military commander warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of U.S. troops.
Among other stocks, shares of casino operator Caesars Entertainment Corp jumped 14% after rival Eldorado Resorts Inc said it agreed to buy the company for $8.5 billion. Shares of Eldorado fell 6.8%.
United Technologies Corp gained 1% after Cowen & Co upgraded shares of the building and aerospace supplier to “outperform” from “market perform”.
Celgene Corp shares fell 3.3% after Bristol-Myers Squibb Co said its planned $74 billion deal to buy the drugmaker was expected to close at the end of 2019 or beginning 2020, compared with its earlier expectations of closing the deal in the third quarter. Shares of Bristol-Myers dropped 3.2%.
Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Anil D’Silva