Futures Set to Take Off After Worst Day of â19
U.S. stock index futures rebounded on Tuesday after China's central bank indicated it wanted its currency to trade at a higher level than expected against the dollar, easing tensions about the nation using its currency as a weapon in the trade war.
Futures for the Dow Jones Industrials rocketed 248 points, or 1%, to 25,798
Futures for the S&P 500 recovered 27 points, or 1%, at 2,857
NASDAQ futures gained 82 points, or 1.1%, to 7,467.25
U.S. equity markets saw their worst trading day of 2019 on Monday. The sell-off had began last week when President Donald Trump announced new tariffs on Chinese goods.
The Dow tumbled 2.9%, the NASDAQ stumbled 3.5%, while the S&P 500 lost 3%,
Shares of companies whose future prospects hang in the balance because of the trade war led the rebound in pre-market trading. Caterpillar, Apple and Micron all traded higher in early trading. Ford rose after an upgrade by Morgan Stanley.
Traders are also monitoring earnings and data. There will be a new JOLTS (Job Openings and Labor Turnover Survey) report at 10 a.m. ET.
Overnight, China's central bank set the yuan's official reference point at stronger than the key seven-yuan-to-the-dollar point on Tuesday.
The move calmed currency markets, initially rocked by fears the U.S.-China trade war was devolving into a currency war.
Meanwhile, the People's Bank of China (PBOC) set the midpoint for the yuan at a level stronger than what markets were expecting on Tuesday. The Chinese central bank sets a daily rate for the currency, allowing it to trade in a band against the greenback within 2% of the midpoint value, also known as the onshore yuan. Its offshore counterpart is used by foreign investors and banks.
Overseas, in Japan, the Nikkei 225 index ditched 0.7% Tuesday, while in the Hong Kong, the Hang Seng index lost 0.7%,
Oil prices picked up 37 cents to $55.06 U.S. a barrel.
Gold prices stepped back two dollars to $1,474.50 U.S. an ounce.