S&P 500 Futures Rise as China Signals Openness to Trade Talks with the U.S.

The U.S. stock market saw a positive shift on Thursday evening after China announced it is evaluating the possibility of resuming trade negotiations with the United States. This move sparked optimism among investors, boosting market sentiment and propelling futures higher.

Market Movements

Futures tied to the broad-based S&P 500 index climbed 0.68%, while Dow Jones Industrial Average futures surged 0.82% (adding 337 points). Nasdaq 100 futures also advanced by 0.32%. This upward momentum came as Wall Street processed earnings reports from two members of the “Magnificent Seven” and braced for the much-anticipated U.S. jobs report.

In after-hours trading, Apple shares slid 4% after reporting fiscal Q2 revenue from its Services division that missed Wall Street’s expectations. The tech giant also noted it anticipates an additional $900 million in costs this quarter due to tariffs. Amazon shares fell 2% following light guidance, with the company citing “tariffs and trade policies” as key challenges.

Tech Sector Drives Gains

The market’s positive tone followed a strong start to May, led by the tech sector. Meta Platforms and Microsoft delivered solid results, helping revive enthusiasm around artificial intelligence-related stocks. The 30-stock Dow gained 0.2%, the S&P 500 advanced 0.6%, and both indexes marked their eighth consecutive day of gains. Meanwhile, the Nasdaq Composite jumped 1.5%, completely erasing its losses since April 2—the day President Donald Trump announced new “reciprocal” tariffs.

Nearly two-thirds of the S&P 500 constituents have reported their quarterly results, with 76% surpassing earnings estimates, according to FactSet data. Adam Crisafulli, founder of Vital Knowledge, commented on CNBC’s “Closing Bell: Overtime”: “We’ve seen a bit of a de-escalation in tariff concerns, but Q1 earnings have been the real driver behind the S&P 500’s rally.”

Eyes on the Jobs Report

A key event that investors are watching closely is April’s jobs report, set to be released Friday morning. This report is expected to provide critical insights into the health of the U.S. economy. Economists polled by Dow Jones forecast payroll growth of 133,000 jobs in April, a significant drop from the 228,000 added in March. The unemployment rate is anticipated to remain steady at 4.2%.

The labor report follows a slew of economic data released earlier this week, which showed signs of a cooling economy. The U.S. gross domestic product (GDP) contracted by 0.3% on an annualized basis in Q1. Private payrolls data from ADP also came in weaker than expected, and weekly jobless claims surged to 241,000—far higher than forecasts.

Market Outlook

As of now, all three major U.S. indexes are on track for their second consecutive week of gains. The S&P 500 is set to rise 1.4% this week, the Dow is eyeing a 1.6% advance, and the Nasdaq is up 1.9% week-to-date. This indicates that, despite mixed economic signals, investor optimism remains intact.

China’s willingness to explore renewed trade discussions with the U.S. has injected fresh hope into global markets. With the trade war having cast a long shadow over international markets in recent years, any sign of thawing tensions is welcomed by investors eager for stability.

Conclusion

In summary, U.S. stocks are experiencing renewed strength amid promising developments on the trade front and solid corporate earnings. However, looming macroeconomic challenges—such as slower GDP growth and signs of softening in the labor market—remain critical factors to monitor. The upcoming jobs report will likely set the tone for near-term market direction.

Source: CNBC 

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