Dow futures headed for a third straight gain, and stocks broadly looked poised for fresh records to start a holiday-abbreviated week as investors focused on a report that China will cut import tariffs for frozen pork, pharmaceuticals and some high-tech components starting from Jan. 1.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average rose 54 points, or 0.2%, at 28,536, those for the S&P 500 index advanced 6.80 points, or 0.2%, at 3,232.50, while Nasdaq-100 futures climbed 25 points, or 0.2%, at 8,727.50.
Last week, the Dow DJIA, +0.28% booked a 1.1% weekly gain, the S&P 500 index SPX, +0.49% returned 1.7% over the period, while the Nasdaq Composite Index COMP, +0.42% climbed 2.2%, marking its largest weekly gain since Aug. 30., according to FactSet data.
All three benchmarks produced a second consecutive weekly advance and a trio of all-time closing highs.
Year-to-date the Dow is up 21.98%, the S&P 500 up 28.55 and the Nasdaq up 34.51%, as of Friday’s close.
What’s driving the market?
Wall Street’s main stock indexes were tipping modestly higher as the U.S. and China attempt to show signs of cementing a partial trade agreement that could set the stage for a more improved business climate in 2020.
Thus far, China’s cabinet has agreed to lower tariffs for all trading partners on more than 859 types of products to below the rates that most-favored nations enjoy, the Finance Ministry said Monday, according to the Wall Street Journal.
The Journal reported that the lowered import duties will apply to frozen pork, as China aims to shore up its meat supplies amid an outbreak of swine fever. Tariffs on some of the products will go to zero.
The move is the latest in a sign that Beijing and Washington are near completing a partial trade agreement that would cease a tariff conflict that has persisted for almost two years and has impeded global and domestic economic expansion, economists say.
“The move by China appears to be partly driven by a domestic shortage, and partly by a desire to build bridges with the US,” David Madden, market analyst at CMC Markets wrote in a Monday note to clients.
Either way it is a step in the right direction for the trading relationship of the two largest economies in the world. As it is Christmas week, market volatility is low and trading ranges are small, so it is possible today’s movements aren’t a true reflection of market sentiment.
Trade for Monday kicks off a shortened week of action, with Tuesday representing a half-day session and most global markets closed on Wednesday for Christmas.
Later in the session, investors will be looking for a report on orders for long-lasting goods due at 8:30 a.m. Eastern Time from the Commerce Department and a report on new-home sales for November due at 10 a. m.