U.S. stocks saw firm gains Tuesday morning, after lawmakers reached a deal to prevent a government shutdown and optimism grew over a potential trade deal between the U.S. and China.

How are major indexes faring?

The Dow Jones Industrial Average

DJIA, +1.01%

 rose 244 points, or 1%, to 25,297, while S&P 500

SPX, +0.90%

 added 23 points, or 0.9%, to 2,733. The Nasdaq Composite Index

COMP, +0.98%

 jumped 72 points, or 1%, to 7,379.

Read: Morgan Stanley warns of a looming earnings recession

What’s driving the market?

Democratic and Republican lawmakers said late Monday that a deal has been reached to avert another damaging government shutdown. Committed to avoiding the repeat of such a scenario, GOP negotiators agreed to a border-security deal that will involve far less money for an extension of the southern U.S. border wall than President Donald Trump has been demanding.

The tentative deal, which involves 55 miles of new border fencing, still requires approval from Trump, who told a rally in El Paso, Texas that “progress is being made with this committee.” He added: “Just so you know, we’re building the wall anyway.”

Trade negotiations entered a second day Tuesday in Beijing, with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer due to arrive Thursday for more high-level discussions. A 12:01 a.m. Eastern time March 2 deadline is looming for an agreement to be struck between the two countries.

Meanwhile, investors digested a new batch of earnings releases Tuesday, as fourth-quarter earnings season enters its final stretch.

Which stocks are worth watching?

Coty Inc.

COTY, +13.46%

shares are in focus Tuesday, after JAB holdings announced its plans to commence a tender offer to acquire 150 million shares of the company at a price of $11.65 per share, versus Monday’s closing price of $9.66 per share. The stock is up 16.4%, early Tuesday.

Shares of Molson Coors Brewing Co.

TAP, -7.88%

are down 6.5% Tuesday morning, after the beer provider reported higher-than-expected, fourth-quarter earnings Tuesday morning, while missing Wall Street revenue forecasts.

The company also disclosed Tuesday that it will restate its financial performance for the years ended in December 2016 and December 2017, as those annual reports can no longer be relied on due to errors in accounting for income taxes related to deferred tax liabilities for its partnership with MillerCoors LLC

Ellie Mae Inc. stock is in focus after the company said it agreed to be acquired by private-equity firm Thoma Bravo in a deal worth $3.7 billion. The stock is up 21.2% Tuesday.

Under Armour Inc.

UA, +1.77%

stock is down 2.6%, even after the company beat earnings and revenue estimates for the fourth quarter.

Shares of Gilead Sciences Inc.

GILD, -4.33%

 are falling 4.7% early Tuesday, after the pharmaceutical company announced Monday evening that a late-stage, placebo-controlled study designed to evaluate a type of chronic liver disease drug, Selonsertib, didn’t meet its desired outcome without worsening the patients’ condition.

US Foods Holding Corp.

USFD, -2.91%

shares are down 4.9% Tuesday, after the company reported fourth-quarter earnings that fell short of Wall Street forecasts, though it surpassed revenue expectations.

Shares of Electronic Arts. Inc.

EA, +3.55%

are up 6.5% Tuesday, after the videogame publisher announced that its new game, “Apex Legends,” had attracted 25 million new players in its first week of availability.

Anticipated reports from TripAdvisor Inc.

TRIP, +0.60%

and Activision Blizzard Inc.

ATVI, +1.97%

are due after the market closes.

What are the analysts saying?

“U.S. Futures are defying all the technicians calling for a pullback, as [news reports] that a deal may be reached in shutdown talks, coupled with Optimism over the week’s China talks,” has S&P 500 futures on the rise, “led to the upside by tech stocks,” wrote Dave Lutz, head of ETFs at JonesTrading, in a Tuesday note to clients.

What data and Fed speakers are in focus?

The National Federation of Independent Businesses small business index fell 3.2 points to 101.2, the lowest level since the weeks leading up to the 2016 presidential election, though above its historical average of 86.

At 10 a.m. Eastern Time, the Labor Department will release its report on job openings and labor market turnover for the month of December.

The Federal Reserve will issue a report on household credit growth at 11 a.m.

At 12:45 p.m. Fed Chairman Jerome Powell will give a speech on rural economic policy at Mississippi Valley State University.

At 6:30 p.m. Cleveland Fed President Loretta Mester, an alternate voting member of the central bank’s interest-rate setting committee, will give a speech on the economic outlook and monetary policy at Xavier University at 6:30 p.m.

Kansas City Fed President Esther George, a voting member, will give a speech on ‘charting U.S. economic course’ in Kansas City at 7:30 p.m.

How did the major benchmarks fare yesterday?

On Monday, the Dow fell 53.22 points, or 0.2%, to 25,053.11, while the S&P 500 rose 1.92 points to 2,709.8, and the Nasdaq Composite Index gained 0.1% to 7,307.90.

How are other markets trading?

In Asia, the Nikkei 225 index returned from a holiday to jump 2.6%, while the Shanghai Composite rose 0.6%, and most other indexes rose. The Stoxx Europe 600

SXXP, +0.51%

was also in positive territory, while the U.K.’s FTSE 100 edged lower.

Crude oil

CLH9, +2.52%

 was up, while gold

GCH9, +0.15%

is higher and the U.S. dollar

DXY, -0.15%

is falling slightly, relative to its peers.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.

Source link