US open: Strong open on the Street as investors shrug off trade concerns

Wall Street got off to a positive start on Wednesday despite reports that the US administration is set to ratchet up the pressure on Beijing on trade.

As of 1540 BST, the Dow Jones was up 0.19% to 25,463.51, while the S&P 500 was trading 0.27% firmer at 2,824.21 and the Nasdaq moved ahead 0.65% to 7,721.63.

Connor Campbell, a financial analyst at SpreadEx, said, "Though the Dow only rose 30 or so points after the bell that was nevertheless far better than what the likes of the FTSE, DAX and co. managed on Wednesday, with the latest bout of trade war terror causing chaos over in Europe. That mild growth allowed the US index to tease 25450 once again, with the Dow around 150-ish points away from last week's five-month highs."

Donald Trump was said to be preparing to raise proposed tariffs on another $200bn-worth of Chinese goods from 10% to 25% with an announcement possible in the next few days.

While the tariffs were not set in stone, the rumours led to a swift response from China, where officials warned the White House against "bullying".

Craig Erlam at Oanda said, "Dominating today's US central bank meet is conflicting signs over the state of the Sino-US trade relations. It's again pulling markets in different directions on rumours that the Trump administration is expected to announce this morning plans to propose tariffs of +25% instead of the initially proposed +10% on +$200B of imported Chinese goods."

"Both equities and commodities are struggling on these headwinds to trade after China threatened to hit back if the US hikes tariffs," added Erlam.

Ten-year US Treasury notes were trading on the back foot, pushing their yield higher by four basis points to 3.0%.

On the corporate front, after gaining 4.17% in early trade, Apple was propping up all the main indices as its market value neared the $1.0trn mark.

On Tuesday, Apple beat analysts' forecasts for its second quarter and guided higher for the next three months, even as both analysts and market watchers highlighted the potential for new products to act as a catalyst for the stock.

Elsewhere in corporate news, Campbell Soup was up 1.08% after the Journal reported that activist investor Third Point had built a stake in the company worth over $300m.

Sprint shares moved 0.55% higher after the telecommunications carrier posted first-quarter earnings per share and sales of four cents and $8.13bn, respectively, managing to edge past analysts' forecasts on both counts.

Humana gained 3.14% after reporting adjusted earnings per share of $3.96 for the latest three-month stretch, easily beating the consensus estimate for $3.77.

Tesla, which was scheduled to report after the close of markets, was up 1.14% despite reports that an ex-employee accused of sabotage was countersuing the firm.

Economic news was generally supportive, with consultancy ADP reporting that private-sector payrolls in the US expanded by 219,000 last month - well ahead of the consensus 180,000 figure.

However, American manufacturers grew at a slower pace in July, held back by shortages of skilled labour, increased costs for raw materials as a result of tariffs and transportation issues.

The Institute for Supply Management's index slipped to 58.1% from 60.2% - the lowest level in 12 months.

The US central bank's policy announcement is still to come at 1900 BST, with no changes expected.