- Mnuchin tells CNBC ‘we were about 90% of the way there’ on China trade deal
- Stocks set to recover a portion of Tuesday’s losses
- Mueller says he will testify on his Russia interference report on July 17
U.S. stock-index futures headed solidly higher Wednesday morning, gaining traction into the green after a report from Treasury Secretary Steven Mnuchin suggested that a Sino-American trade deal wasn’t far from complete.
Futures for the Dow Jones Industrial Average YMU19, +0.42% rose 133 points, or 0.5%, to 26,694, those for the S&P 500 ESU19, +0.42% advanced 16.40 points, or 0.6%, at 2,938, while Nasdaq-100 futures NQU19, +0.68% climbed 66.75 points, or 0.9%, to 7,695.75.
Mnuchin told CNBC that Beijing and Washington are nearing a deal on tariffs. “We were about 90% of the way there (with a deal) and I think there’s a path to complete this,” he told the financial network in Bahrain.
The treasury secretary said that he was “hopeful” that a deal could be struck as the market awaits a sideline conversation between President Donald Trump and Chinese President Xi Jinping at the Group of 20 gathering in Osaka, Japan, which kicks off on Friday.
Concerns about escalating trade tensions between the China and the U.S., the world’s largest economies, have fed a sense of rising uncertainty about the health of the global economy, at least partly contributing to central banks across the world signaling a willingness to reinstitute a fresh wave of economic stimulus just about 10 years after the 2008 financial crisis rocked financial markets world-wide, warranting a wave of easy-money programs by monetary policy makers.
On Tuesday, equity markets suffered one of the worst declines in about a month, led by a selloff in trade-sensitive informational technology shares, also among the risky assets that have helped to lead the S&P 500 SPX, -0.95% last week to its first record since April 30. Even with yesterday’s slide, the Dow Jones Industrial Average DJIA, -0.67% stands about 1% shy of its Oct. 3 record, while the tech-heavy Nasdaq Composite Index COMP, -1.51% is within reach of its May 3 all-time closing high, despite giving up 121 points, or 1.5%, in the prior session.
Tuesday’s slump came as Federal Reserve Chairman Jerome Powell, speaking at the Council on Foreign Relations in New York, signaled that an interest-rate cut in July is not a done deal, emphasizing that the central banks was still monitoring the economy and “grappling” with signs of weakness to avoid a knee-jerk reaction as it considers dialing back benchmark rates.
What’s more, well-known dove, St. Louis Fed President James Bullard said he wasn’t advocating next month for a too-aggressive cut of 50 basis point to key federal-funds futures rates, which currently stand at a range between 2.25%-2.50%.
Wall Street currently has the odds of a rate cut in July at 100%, according to the CME Group’s FedWatch tool.
Read: Fed’s Bullard says he is not in favor of half point rate cut in July
Check out: Powell says the Fed is ‘grappling’ with whether to cut interest rates
On the economic data front, investors are awaiting a reading of durable-goods orders for May, and a separate report on international trade in goods for the same month, both at 8:30 a.m. Eastern Time.
Market participants may also be partly watching the White House after reports indicated that Special counsel Robert Mueller will testify before the House Judiciary and Intelligence committees on July 17. Democrats have been wanting to hear from Mueller personally, regarding his investigation into Russian interference in the 2016 election as well as possible obstruction of justice by President Donald Trump.
Which stocks are in focus?
Shares of Apple Inc. AAPL, -1.52% were in focus after the iPhone maker and tech giant acquired autonomous-driving startup Drive.ai, according to multiple reports. Apple confirmed the deal to both Axios and the San Francisco Chronicle. Shares of Apple were up 1.2% in premarket action Wednesday.
Micron Technology Inc. shares MU, -1.54% rose 10% before the bell Wednesday after the memory-chip maker’s results topped lowered expectations for the quarter, and executives forecast improvement in the fourth quarter even though actual numbers were shy of expectations.
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