By Amy Caren Daniel
(Reuters) – Wall Street was set to open higher on Tuesday, buoyed by a tentative deal reached by U.S. lawmakers to avoid another partial government shutdown and after the United States and China expressed optimism about the ongoing trade talks.
However, it was unclear if President Donald Trump would embrace the deal as congressional aides said it did not contain the $5.7 billion he wants for a border wall.
“What investors are taking from this is that the government stays open, whether or not Trump signs on the deal is secondary,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“There is a lot of optimism around the trade talks and hopes for some kind of a deal in the making.”
The U.S.-China talks resumed on Monday as both sides attempt to strike a deal before the March 1 deadline, when additional U.S. tariffs on Chinese imports will come into force.
U.S. Trade Representative Robert Lighthizer arrived in Beijing on Tuesday, ahead of high-level talks scheduled later this week.
Trade-sensitive industrial bellwethers rose in premarket trading. Boeing (NYSE:) Inc and Caterpillar Inc (NYSE:) were both up nearly 1 percent each, while chipmakers, which get a huge chunk of their revenue from China, also gained.
Advanced Micro Devices (NASDAQ:) Inc, Micron Technology Inc (NASDAQ:) and Intel Corp (NASDAQ:) rose between 1 percent and 1.7 percent.
Trade war topped the list of biggest tail risks for the ninth straight month, followed by a slowdown in China, according to Bank of America (NYSE:) Merrill Lynch’s February survey.
At 8:28 a.m. ET, were up 194 points, or 0.78 percent. were up 18.5 points, or 0.68 percent, and were up 54.75 points, or 0.79 percent.
Optimism on trade, a largely upbeat fourth-quarter earnings season and a dovish Federal Reserve have now put the just 8 percent away from its Sept. 20 record closing high.
About 71 percent of the S&P companies that have posted earnings have topped expectations, according to IBES data from Refinitiv. But analysts’ estimates for first-quarter earnings have turned negative for the first time since 2016.
Under Armour Inc (NYSE:) rose 1.4 percent after the sportswear maker reported quarterly profit that beat estimates as it sold more sneakers at full price.
Gilead Sciences Inc (NASDAQ:) fell 3.4 percent after a late-stage study of its drug to treat a progressive fatty liver disease failed to meet its main goal.
Electronic Arts Inc (NASDAQ:) jumped 8.3 percent after the videogame maker said its newly launched battle royal game “Apex Legends” crossed more than 25 million players.
Economic data on tap includes the JOLTS job openings numbers for December due at 10 a.m. ET. The numbers are forecast to have risen to 6.900 million from 6.888 million in November.
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