Stock-index futures edge higher as investors keep focus on China
The Chinese government announced a reduced growth target for 2019
U.S. stock-index futures held on to small gains Tuesday as investors continue to keep an eye on developments surrounding U.S.-China trade talks and China’s domestic economy.
What are indexes doing?
On Monday, the Dow DJIA, -0.79% ended at a 2-week low, falling 206.67 points, or 0.8%, to 25,819.65.
The S&P 500 SPX, -0.39% fell 11.07 points, or 0.4%, to close at 2,792.62, and the Nasdaq Composite Index COMP, -0.23% declined 17.79 points, or 0.2%, to 7,577.57.
What’s driving the market?
Monday’s soft close came as initial enthusiasm faded over reports that U.S. and Chinese negotiators were close to completing a trade deal.
Premier Li Keqiang at the opening of the annual session of China’s legislature outlined plans to underpin the economy, including an increase in deficit spending, new tax cuts and other fee cuts for businesses, and a boost in bank lending to small and private companies by 30%.
What are analysts saying?
“Trade optimism could only take the stock market so far. High level talks between the two largest economies have been ongoing and although they appear close to bearing fruit, the fact remains that the optimism has already been priced in,” said Alfonso Esparza, senior market analyst at Oanda, in a note.
“Details on the agreement will be needed to unlock gains as investors preferred government bonds until an official announcement dispels all doubts of the U.S.-China agreement.”
