Futures bounce on trade hopes, Micron results

[June 26, 2019]  By Shreyashi Sanyal

(Reuters) - U.S. stock index futures rose on Wednesday after Treasury Secretary Steven Mnuchin said the United States and China were close to reaching a trade deal, with strong results from chipmaker Micron adding to the upbeat mood.

"We were about 90% of the way there (with a deal) and I think there's a path to complete this," Mnuchin said in an interview to CNBC.

Trade-sensitive industrial companies, including Boeing Co and Caterpillar Inc, gained about 1% in premarket trading.

The three main Wall Street indexes fell nearly 1% on Tuesday after the Federal Reserve chairman pushed back on pressure from President Donald Trump to cut interest rates.

However, traders still fully expect a rate cut from the Fed in July and see a 25% possibility of a half-point move.

The S&P 500 index has rallied 6% so far in June, hitting a record high last week, on hopes that the Fed would cut rates to counter the impact of the trade war.

Micron Technology Inc jumped 7.8%, leading a rally among chipmakers which often source and supply products to China.

The company said it had resumed some shipments to Chinese telecoms equipment maker Huawei Technologies Co Ltd and still expected demand for its chips to recover later this year.

Shares of Intel Corp, Advanced Micro Devices Inc and Nvidia Corp rose between 1.4% and 3%.
 

Traders work on the main trading floor after the opening bell at New York Stock Exchange (NYSE) in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid/File Photo

At 7:18 a.m. ET, Dow e-minis were up 104 points, or 0.39%. S&P 500 e-minis were up 11.5 points, or 0.39% and Nasdaq 100 e-minis were up 47.25 points, or 0.62%.

Market participants are awaiting a planned meeting between President Donald Trump and his Chinese counterpart Xi Jinping at the Group of 20 summit in Japan on Friday.

Among other stocks, General Mills Inc slipped 3.2% after the food packaging company missed quarterly sales estimates, hurt by lower demand for its snacks in North America.

On the data front, the Commerce Department is expected to report that overall orders for durable goods likely dipped 0.1% in May, after a 2.1% fall in the prior month. The data is due at 8:30 a.m. ET.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva)

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