US pre-open: Stocks seen up as shutdown drags on; Starbucks rallies

US stocks looked set for a positive open on Friday even as investors continued to grapple with the government shutdown and worries about Sino-US relations.

At 1235 GMT, Dow Jones Industrial Average and S&P 500 futures were up 0.7%, while Nasdaq futures were 1% higher.

Sino-US relations remained in focus as investors mulled over conflicting signals.

US Commerce Secretary Wilbur Ross warned that the US and China were "miles and miles" away from ending their trade dispute. However, he also said that there was a fair chance that China will get a trade deal. Meanwhile, Trump's economic advisor Larry Kudlow said the US president is optimistic on trade talks.

Oanda analyst Craig Erlam said: "Trade negotiations between the US and China continue to be a major focal point for investors, with an apparent softening of tensions since the G20 in December contributing to the improved risk appetite we're currently seeing.

"The rhetoric coming from these talks has broadly been positive but this week, it has been a little mixed suggesting talks may have stalled with just over a month to go until the 90-day deadline."

He added that Kudlow's comments have "failed to kill suspicions that talks aren't going as well as previously claimed".

Meanwhile, the partial government shutdown rumbled on into its 34th day, after the US Senate rejected two bills on Thursday aimed at ending it. The Republican bill included funding for President Trump's Mexico border wall, while the Democratic plan did not, but both measures failed to win the 60 votes needed to proceed.

In corporate news, Intel Corp was sharply lower in pre-market trade after its fourth-quarter revenue came in lower than expected and its outlook disappointed.

Colgate-Palmolive was also in the red as the consumer products group's fourth-quarter earnings fell short of analysts' expectations but revenue was a beat.

Elsewhere, Starbucks was set for gains at the open after the coffee chain beat earnings estimates with its fourth-quarter numbers late on Thursday.

Shares in Western Digital Corp rallied ahead of the opening bell following the release of second-quarter earnings late on Thursday.