Off The Wire
Wall Street set to open higher on Huawei reprieve
(Reuters) - U.S. stock indexes were set to rise at the open on Tuesday, as concerns over a further escalation in the U.S.-China trade war eased after the United States temporarily relaxed curbs on China’s Huawei Technologies.
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.
Companies that have been supplying to Huawei including Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 1.4% and 3%.
“The easing up on Huawei is being seen as a sign that while the United States and China are unhappy with each other, neither side wants to burn the negotiation bridge at the moment,” said Connor Campbell analyst at Spreadex in London.
President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world’s largest telecom equipment maker and triggering fears that the decision could deeply impact the global technology sector.
Reuters reported on Sunday that Alphabet Inc’s Google would stop providing Huawei access to its proprietary apps and services. But Huawei said on Tuesday it is working closely with the U.S. company to resolve the restrictions.
Wall Street has been impacted by mounting concerns about a prolonged trade war, with the S&P 500 set to post its worst monthly decline since the December sell-off. The benchmark index is trading nearly 4% below its all-time high hit earlier in May.
“This is pure case of cautiousness and we’re stuck in a trading range. The recent behavior is of indecisiveness,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said.
At 8:31 a.m. ET, Dow e-minis were up 138 points, or 0.54%. S&P 500 e-minis were up 14 points, or 0.49% and Nasdaq 100 e-minis were up 46 points, or 0.62%.
Investors also focused on earnings reports from a handful of retailers.
Home Depot Inc shares dipped 0.5% 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 1%.
Department store operator J.C. Penney Co Inc fell 7.8% after the company reported a bigger-than-expected fall in quarterly comparable-store sales.
Rival Kohl’s Corp tumbled 8.8% after the company cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Department store operator Nordstrom Inc dropped 1.3%. The company is expected to report results after markets close on Tuesday.
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 and Arun Koyyur