US pre-open: Stocks to rise amid Sino-US hopes; Trump's wall speech eyed

US stock futures pointed to gains on Wall Street at the open on Tuesday as investors grew hopeful that the latest round of talks between the US and China would ease trade tensions.

At 1230 GMT, Dow Jones Industrial Average and Nasdaq futures were up 0.8%, while S&P 500 futures were 0.7% higher.

A second day of talks between Chinese and US officials was due to kick off in Beijing later.

Konstantinos Anthis, head of research at ADSS, said: "Investors are hoping for some kind of progress that will allow equities to recover, while the recent downbeat tone coming from the Fed is also helping things amid expectations for fewer rate hikes.

"However, investors will now start focusing on the US earnings' season and it will be key to see whether corporate results continue to slow down, further dampening risk sentiment."

Meanwhile, Spreadex analyst Connor Campbell said there's every chance markets could be setting themselves up for a disappointment "given that there isn’t exactly a lot behind Tuesday’s rally - as in a lack of concrete detail leaking out of the meeting rooms in Beijing".

"Investors appear to be clinging onto US Commerce Secretary Wilbur Ross’ claim that there is a ‘very good chance’ can agreement can be reached before the end of the ceasefire on March 1," he added.

The government shutdown, which has entered its third week, was also likely to be on investors' minds as President Trump was due to make a speech later from the Oval Office, in which he is expected to argue that an immigration crisis requires his Mexican border wall.

In corporate news, Boston Scientific was likely to see active trade after the release of its fourth-quarter sales figures.

On the data front, the latest survey from the National Federation of Independent Business showed that small business confidence in the US remained near historically-high levels in December amid signs of strength in hiring and in companies' inventory planning.

But some analysts said the stable headline index masked underlying weakness and rising price pressures.

The NFIB's small business confidence gauge slipped by just 0.4 points from the month before to reach 104.4, versus consensus expectations for a reading of 103.5. Meanwhile, a sub-index linked to job openings hit a fresh record high and according to the NFIB plans for inventory investment surged.

However, those positives were offset by a decline in expected real sales growth and expected business conditions.

Reports of higher worker compensation remained near record levels too, NFIB said.

According to the business lobby group: "Critics of the Federal Reserve are popping up everywhere. They say that the Federal Reserve is not paying attention to what financial markets are telling us about the economy.

"However, the stock market does not reflect the entire economy. The small business sector represents the other half and it continues its two-year run of record high performance levels, an important consideration."

Still, Ian Shepherdson at Pantheon Macroeconomics believed a further decline in business optimism was likely in January.

In particular, Shepherdson noted the four point decline seen in the sub-index for companies' capital expenditure plans, which he described as a "big blow", although it remained to be seen if the drop would "stick" or even drop further.

Still to come, the trade balance is at 1330 GMT and JOLTS job openings are at 1500 GMT.