(Reuters) – U.S. stock index futures jumped around 2 percent on Monday, setting Wall Street up to add to last week’s strong gains, after the United States and China declared a temporary trade truce.
Strong gains in Apple Inc (AAPL.O) and other technology stocks pushed Nasdaq futures NQc1 up more than 2 percent, while S&P 500 e-minis ESc1 touched a near 1-month high. Gains in Dow futures set the blue-chip index up for a near 450-point gain at the open.
Washington and Beijing agreed to a 90-day trade ceasefire during the G20 summit in Argentina on Saturday and U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs below the 40 percent level that the country is currently charging on U.S.-made vehicles.
However, the White House also said that the existing 10 percent tariffs on $200 billion worth of Chinese goods would be lifted to 25 percent if no deal was reached within 90 days.
The trade optimism spilt over to shares of Apple, which gained 3.3 percent in premarket trading.
Trump had said last week that the next round of tariffs could also be placed on the company’s iPhones, as part of the $267 billion list of goods not yet hit by tariffs.
Trade-sensitive Caterpillar Inc (CAT.N), Boeing Co (BA.N) gained over 4.5 percent each, while U.S. carmakers General Motors Co (GM.N), Ford Motor Co (F.N) and Tesla Inc (TSLA.O) rose between 3 percent and 4 percent.
Shares of energy companies also rose as crude prices surged, helping lift Exxon Mobil Corp (XOM.N) up by 2.1 percent and Chevron Corp (CVX.N) by 2.4 percent. [O/R]
“Most of us were hoping that we would come out of these discussions with no new tariffs and a pause, which is ultimately what we got,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
Image from RT.com
