US pre-open: Stocks set to surge following ceasefire in US-China trade war

Wall Street stocks looked set to surge at the open on Monday as participants digested news coming from China, Japan and North Korea over the weekend.

As of 1200 BST, Dow futures had the index opening 1.05% higher, while the S&P 500 and Nasdaq-100 were on track for gains of 1.15% and 1.77% at the bell, respectively.

While stocks closed only slightly higher on Friday, US futures had indices storming out of the gate on Monday after Xi Jinping and Donald Trump agreed to halt further tariffs on products from their respective nations as part of an effort to resume trade talks.

Trump said the meeting between the pair had gone as well as it could have, noting: "We are right back on track," while Chinese state-run news outlet Xinhua said the two leaders had agreed "to restart trade consultations between their countries on the basis of equality and mutual respect".

The US President also revealed Washington would ease restrictions on American companies selling products to telco giant Huawei, potentially boosting chipmakers such as Skyworks, AMD and Qorvo - shares of which were all down by more than 10% on the year.

Ahead of the open, IG senior market analyst Josh Mahony said: "The weekend meeting between Trump and Xi Jinping has provided a welcome boost for markets, with US indices heading towards record highs. Meanwhile, the UK manufacturing sector has declined further into contraction.

"The G20 meeting managed to deliver for markets, as Donald Trump avoided levying any further tariffs and instead laid out a plan to get the US-China trade talks back on track."

However, despite the positive developments Larry Kudlow, director of the National Economic Council, stated that Trump was not granting Huawei a "general amnesty" and also cautioned that there was no timetable for finalising a deal as of yet.

On the data front, ISM manufacturing and construction spending data will be posted at 1500 BST, while in corporate news, Natural Shrimp and Singing Machine were both set to reveal their fourth-quarter report cards.