US pre-open: Stocks to rise amid cautious optimism over debt deal

US stock futures pointed to a positive open on Tuesday amid cautious optimism that a debt default will be avoided after lawmakers agreed a tentative deal over the weekend.

Just after midday, Dow Jones Industrial Average futures were up 0.2%, while S&P 500 and Nasdaq futures were 0.6% and 1.2% firmer, respectively.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "A deal may have been struck on the debt ceiling, but it’s not fully calmed nervousness on financial markets. Limits on spending are being imposed just as America looks set to head towards recession, which could make it harder for growth to snap back.

"Clamour from dissenting voices on both sides of the political divide are rising, ahead of a crucial Congressional vote later today. Nevertheless, the US does appear to be inching towards Budget agreement, although it’s likely to take a good deal of wrangling this week before it’s passed. Although the debt ceiling will be lifted for two years, Republicans won some of their demands for limits on federal spending but not enough to assuage some Conservatives on the right of the party."

On the corporate front, Nvidia rallied just over 3% pre-market after the technology company’s founder and chief executive Jensen Huang unveiled a series of new products and partnerships in a speech at a Taiwan tech trade show.

Elsewhere, Ford shares also rose in pre-market trade after Jefferies lifted its stance on the stock to ‘buy’ from ‘hold’.

"Last week's investor event in Dearborn raised our confidence that Ford finally has the plan and the team in place to close a deficit of execution that has dogged shares for years," the bank said. It added that the gap between Ford's ambitions a consensus stuck below 6% is attractive and said it expects sequential improvements across divisions.