US indexes futures open with gains on optimism about trade de-escalation

S&P 500 futures are up 0.6% in early trading this week. Nasdaq 100 and Dow Jones futures are also up 0.7% and 0.5%, respectively.

US stock indexes are poised for a positive opening amid optimism about the possibility of de-escalating trade tensions between the United States and China and moving toward negotiations. This could reduce the risk of a broader trade war after the two economic powers’ mutual escalation, which has caused uncertainty in the markets.

Republican Representative Steve Daines, a pro-Trump Republican, visited China and met with Premier Li Qiang on Sunday. This visit marks the first visit by a US political figure to China since Trump took office earlier this year. It also represents an important step that paves the way for the next meeting between the Chinese and US presidents, according to Daines.

This comes a week before the beginning of April, when Trump is expected to impose broader tariffs. However, the beginning of actual signs of the beginning of the negotiating process should calm market fears about trade escalation.

Also, the outlines of the tariffs Trump will impose have become clearer than previously, which could help reduce the uncertainty resulting from the turmoil in trade policy decisions. The sectors of which tariffs will be imposed on (such as autos, pharmaceuticals, and semiconductors) that were initially planned will be narrowed, while the focus will instead be on retaliatory tariffs targeting countries with which the United States has a trade imbalance.

Meanwhile, the fate of the tariffs imposed on Canada and Mexico, as well as those imposed on specific sectors, remains unclear, according to the Wall Street Journal. This, in turn, could leave the door open to further market shocks.

Moreover, if uncertainty persists regarding the decision on tariffs, in particular, investor capital outflows from US stock markets may continue.

Among the most prominent alternatives now are European markets, especially after the acceleration of defence spending and the German parliament’s approval of a trillion-euro package for massive defence and infrastructure investments.

This week, markets will witness a series of crucial data releases, most notably the S&P Global flash PMI report and initial jobless claims, and the core Personal Consumption Expenditures Price Index (core PCE), in addition to personal spending and income figures.

These figures may help strengthen market expectations regarding the likely path of monetary policy by the Federal Reserve for the rest of this year and may also provide a clearer picture of the state of US economic sentiment amid the recent turmoil.