Futures bounce as U.S. eases restrictions on Huawei

[May 21, 2019]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures rose on Tuesday after the United States temporarily eased restrictions on China's Huawei Technologies, allaying investor concerns over a further escalation in a bitter trade war between the two countries.

Chipmakers, which bore the brunt of Monday's sell-off, rose in premarket trading after Washington granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19.

Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 1.3% and 3%.

President Donald Trump added Huawei to a trade blacklist on Thursday, and several companies have suspended business with the world's largest telecom equipment maker, triggering fears that the decision could have a bigger impact on the global technology sector.

Reuters reported on Sunday that Alphabet Inc's Google would stop providing Huawei with access to its proprietary apps and services but Huawei said on Tuesday it is working closing with the U.S. company to resolve the restrictions.

At 7:14 a.m. ET, Dow e-minis were up 126 points, or 0.49%. S&P 500 e-minis were up 16 points, or 0.56% and Nasdaq 100 e-minis were up 61.5 points, or 0.83%.

Investors will also turn their attention to earnings from a handful of retailers.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid

Home Depot Inc shares dipped 0.1% after the home improvement chain reported its slowest growth in quarterly same-store sales in at least three years. Rival Lowe's Cos Inc fell 0.2%.

Department store operator J.C. Penney Co Inc and rival Kohl's Corp posted disappointing quarterly same-store sales. J.C. Penney fell 7%, while Kohl's tumbled 10%.

After touching record highs at the beginning of May, Wall Street's main indexes have succumbed to selling pressure on mounting concerns about a prolonged U.S.-China trade war. The S&P 500 is on track to post its worst monthly decline since the December sell-off, trading nearly 4% below its all-time high.

On a thin day for economic data, the National Association of Realtors is expected to show U.S. existing home sales rose to a seasonally adjusted annual rate of 5.35 million in April from 5.21 million in March. The report is due at 10 a.m. ET.

(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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