US open: Stocks keep adding to gains
US stocks nudged higher at the open on Tuesday following strong gains during the previous session, with Tiffany's on the rise following well-received results.
As of 1540 BST, the Dow Jones had picked up 0.19% to 26,097.92, while the S&P 500 was 0.09% ahead at 2,899.27 and the Nasdaq was 0.18% firmer at 8,032.00.
Donald Trump announced on Monday that the US and Mexico had agreed to the terms of a new trade deal which he hoped would replace the North American Free Trade Agreement (NAFTA). It has been reported that the new deal would require 75% of auto content to be made in the NAFTA region, up from 62.5%, while 40% to 45% would have to be made by workers earning an average of at least $16 per hour.
Stocks surged on the news on Monday, with the S&P 500 and the Nasdaq hitting fresh records and the Dow breaching 26,000 for the first time since early February.
CMC Markets analyst David Madden said: "The trade deal needs to be approved by Congress, but investors are clearly confident of it getting approved. Trade tensions have been hanging over equity markets, and this is certainly a step in the right direction. It is believed that Canada will be on the agenda next, and traders will be paying close attention to those developments."
Meanwhile, US-China trade relations were still in focus.
Madden said: "It would appear that the trade spat will rumble on and there is chatter in the markets that the US is eyeing up another round of tariffs on Chinese goods, but this time it could be up to $200bn worth of Chinese imports," said Madden.
"The US Department of agriculture has plans to financially support farmers who have been targeted by Beijing’s tariffs, and this initiative suggests how determined Washington DC is to maintain a hard-line."
In corporate news, Tiffany's rallied 6% at the bell after its second-quarter earnings and sales beat forecasts and the company lifted its outlook.
Aspen Insurance was up 2.31% after agreeing to be bought by private equity firm Apollo Global Management in a $2.6bn deal.
Best Buy, BJ's Wholesale and DSW were also set to release their quarterly earnings.
On the data front, US wholesale inventories for July rose by a greater-than-expected 0.7%, well and truly topping estimates of a 0.2% reading.
Retail inventories came in at 0.4% versus the 0.1% last month.
Elsewhere, the US July advance goods trade deficit came in at $72.2bn, over and above the $69bn forecast by economists as exports dipped to $140bn and imports rose to $212.2bn.
In other news, US home prices pumped the brakes in June, with the S&P Case-Shiller National Home Price Index coming in at 6.2%, down from the 6.4% recorded in the prior month, indicating that rising mortgage rates and growing affordability challenges may finally be slowing price gains.
Lastly, service sector activity was "robust" in August, according to the Federal Reserve Bank of Richmond, who revealed that its manufacturing index was higher than expected at 24, versus estimates of 17, ahead of the prior month's reading of 20.