Getty Images
U.S. stock-index futures were little changed on Tuesday, though major indexes were poised to open near record levels as recent upward momentum looked intact on easing concerns over trade policy.
What are the main benchmarks doing?
Futures for the Dow Jones Industrial Average YMU8, +0.00% rose 8 points to 26,086, a rise of less than 0.1%. S&P 500 futures ESU8, +0.01% were up less than 1 point to 2,899. Nasdaq-100 futures NQU8, +0.13% rose 10 points to 7,578, a gain of 0.1%.
Wall Street rallied sharply on Monday, with both the S&P 500 SPX, +0.77% and the Nasdaq COMP, +0.91% closing at records for a second straight session and the Dow Jones Industrial Average DJIA, +1.01% exiting its longest stint in correction territory since 1961. Internal data suggested some signs of panic-like buying in the major indexes.
What’s driving markets?
Monday’s gains came as investors cheered a new trade deal between the U.S. and Mexico, with President Donald Trump announcing that he wants to drop the name “North American Free Trade Agreement” from an existing deal that includes Canada. Trump said that trade talks with Canada would begin soon.
Details of the agreement weren’t immediately available, but the step was taken as a sign of progress and helped to remove one of the biggest headwinds hanging over markets this year. Concerns over trade policy have been a primary driver of market activity in both directions this year, as investors fret that rising tensions between the U.S. and its major trading partners — highlighted by the variety of tariffs the Trump administration has levied against China and the European Union and the resulting retaliatory moves — could become a full-blown trade war.
While Wall Street has largely muscled past these concerns, boosted by strong corporate profits and economic data, any resolution of trade uncertainty is seen as easing the uncertainty surrounding the market’s outlook.
Despite the development with Mexico, trade will remain at the forefront of stock trading, as negotiations with China and other major partners are still to come, and the latest round of talks with China resulted in no visible signs of progress.
What are market analysts saying?
Axel Christensen, chief investment strategist for Latin America BlackRock, called the announcement “a key milestone” for the trade negotiations.
“Of course,” he added, “[Monday’s] news and an eventual agreement with Canada could face obstacles as they require the approval of each country’s legislature. As such, uncertainty risk — and the accompanying market volatility — are not yet completely ruled out.”
What stocks are in focus?
Aspen Insurance Holdings Ltd. AHL, +4.43% agreed to be bought by private-equity firm Apollo Funds in a deal valued at $2.6 billion.
VMware Inc. VMW, -0.89% said it plans to buy CloudHealth. Terms of the agreement weren’t disclosed, but Reuters reported that VMware would pay about $500 million.
Affimed NV AFMD, +0.00% late Monday said it had entered into an agreement with Roche Holding’s ROG, -0.29% Genentech to develop and commercialize immunotherapeutic treatments for multiple cancers. The stock more than doubled in after-hours trading on Monday.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.