Market Snapshot: Stock stock-index futures drift lower as U.S-China trade talks take focus

Stock-benchmark futures slipped early Thursday as investors watched fast-moving developments on trade talks, amid the start of high-level discussions in Washington between the world’s biggest economies.

How are the benchmarks performing?

Futures for the Dow Jones Industrial Average YMZ19, -0.19%  were down 57 points, or 0.2%, to 26,248, those for the S&P 500 index ESZ19, -0.15% were off 5.15 points to reach 2,913.5, a decline of around 0.2%, while Nasdaq-100 futures NQZ19, -0.12% slipped 12.75 points, or less than 0.2%, to 7,686.

On Wednesday, the Dow DJIA, +0.70% rose 181.97 points, or 0.7%, to end at 26,346.01. The S&P 500 index SPX, +0.91% gained 26.34 points to finish at 2,919.40, up 0.9%, while the Nasdaq Composite Index COMP, +1.02% added 79.96 points, or 1%, to close at 7,903.74.

What drove the stock market?

Chinese Vice Premier Liu He is scheduled to meet with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin later Thursday in Washington, with the hope that the parties can resolve, at least partially, tensions over trade that have stoked anxieties on Wall Street, though it is unclear if a substantive agreement can be achieved.

Markets were whipsawed overnight Thursday by reports from the South China Morning Post suggesting that the China delegation would leave Washington on Thursday, a day earlier than had been planned. However, a White House spokesperson later told CNBC that there were no changes to plans of the Beijing representatives.

Bloomberg News reported that the White House may implement a previously agreed upon currency deal with China ahead of schedule, and suspend tariff hikes to 30% from 25% scheduled to take effect Oct. 15 on some $250 billion in China products. Those moves would be part of a first-phase agreement with China, the report said, with negotiations on critical issues such as intellectual-property rights and forced technology transfers coming at a later time.

Separately, the New York Times reported Wednesday night that President Donald Trump had approved issuing licenses to some U.S. companies to conduct business with Chinese telecom giant Huawei Technologies. The U.S. blacklisted Huawei earlier this year, and allowing sales of non-sensitive products could help defuse trade tensions.

“The last round of trade talks ended in July without an agreement. Expectations for a breakthrough this time are low, but there is good reason to expect that talks will continue,” wrote strategists at UniCredit in a Thursday research note.

“There appears to be some willingness on both sides to reach a deal,” the strategists said.

Looking ahead, investors also will watch for a report on U.S. consumer price inflation, set to be released at 8:30 a.m. Eastern Time, along with a report on weekly jobless claims due at the same time.

Which stocks are moving?

Shares of Nike NKE, +0.84%   fell by less than 0.2% before the opening bell after Oppenheimer raised its price target for the sportswear brand to $115 from $100.

PG&E’s stock PCG, +0.73%   plunged 30% in premarket trading after a judge ruled to allow for a competitive bankruptcy plan, opening up the path for Elliott Management Group and other bondholders to push for their own chapter 11 plan. Their proposal would involve raising new money and using most of PG&E’s equity to pay off the utility firm’s debts.

Shares for Ra Pharmaceuticals Inc. RARX, +0.33%  looked to surge 105% after Belgian biopharma company UCB agreed to acquire the Mass-based biopharma company for $2.5 billion.

How are other assets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.33% was little changed at 1.587%, from 1.585% late Wednesday.

Gold futures edged slightly higher after small gains on Wednesday. Gold for December delivery GCZ19, -0.03% was up less than 0.1% at $1,513.00 an ounce after rising 0.6% on Wednesday.

West Texas Intermediate crude for November delivery CLX19, +0.61% rose 11 cents, or 0.2%, at $52.70 a barrel on the New York Mercantile Exchange.

In Asia overnight Thursday, trade was mixed, with Hong Kong’s Hang Seng Index HSI, +0.10%  added 0.1% to 25,707.93, the China CSI 300 000300, +0.82% rose 0.8% to reach 3,874.64, and Japan’s Nikkei 225 NIK, +0.45% gained 0.5% to 21,551.98. The Stoxx Europe 600 SXXP, -0.25%, meanwhile, edged 0.2% lower to 379.48.

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