US pre-open: Stocks to rise as investors set aside trade war fears for now

US stocks were set for a positive open on Tuesday as investors put their worries about a trade war aside.

Just after midday, Dow Jones Industrial Average futures were up 0.5%, while S&P 500 and Nasdaq futures were 0.4% and 0.6% firmer, respectively. On Monday, stocks managed to reverse early losses to close up thanks to a rally in the technology sector.

In currency markets, the dollar was down 0.1% against the euro as the single currency found some support from news that German chancellor Angela Merkel has secured a border deal to prevent her coalition from collapsing.

IG analyst Joshua Mahony said: "German political concerns have been largely eradicated over the past week, with the recent EU deal on migrants clearly removing a key hurdle between Angela Merkel’s CDU party and their Bavarian sister party, the CSU. With German leadership looking relatively stable under Merkel, the likely continuation of her leadership allows investors to look beyond domestic affairs and concentrate back on the global picture once again."

Despite the upbeat tone in markets, escalating trade tensions remained in focus, particularly after it emerged that the Trump administration has recommended to the Federal Communications Commission that China Mobile not be allowed to enter the US telecommunications market for reasons of national security.

The National Telecommunications and Information Administration, a branch of the Commerce Department, said on Monday that China Mobile’s entry "would pose unacceptable national security and law enforcement risks".

Accendo Markets analyst Mike van Dulken said: "This understandably adds to fears of a US-China trade war stepping up another level (£34bn US tariffs on Chinese goods due Friday), putting at risk the rare occurrence of synchronised global growth."

In corporate news, electric car maker Tesla was likely to be in focus following a Wall Street Journal report that its top engineer Doug Field is leaving.

Elsewhere, Micronet Enertec Technologies was set to surge at the open following news that BNN Technology bought a 15% stake in the company last month.

On the data front, the ISM NY index for business conditions is at 1445 BST and factory orders are at 1500 BST.