US open: Wall Street opens firmer despite near decade-high trade deficit figures

US stocks opened firmer on Thursday with Wall Street adding to the gains seen in the previous session, as investors shook off concerns about a trade war between the US and China.

At 1520 BST, the Dow Jones Industrial Average and S&P 500 were up 0.68% and 0.52%, respectively, while the Nasdaq was moving 0.57% higher.

Shared had ended higher on Wednesday despite worries about a trade war between the US and China erupting, following reports that President Trump might be a little flexible on one point of the North American Free Trade Agreements. Analysts were also quick to point out that the measures announced by both the US and China were not a done deal, meaning there was room for negotiation between the two counties.

David Madden, market analyst at CMC Markets, said: "Now that China has hit back with proposals of sizeable tariffs on US imports, room to renegotiate a new trade relationship has opened up before the levies will actually be implemented. Beijing has indicated it is open to softening its stance, and this has boosted investor sentiment. Dealers love snapping up relatively cheap stocks, and now the mood is optimistic, they are wasting no time."

Also helping to underpin the risk-on tone in markets were conciliatory comments from a number of senior US officials.

National Economic Council Director Larry Kudlow suggested on Wednesday that it was possible the tariffs on China might not ever actually come into place, insisting that for now, they are just proposals. Meanwhile, Commerce Secretary Wilbur Ross said that "even shooting wars end with negotiations".

However, Oanda analyst Craig Erlam said a trade war remained a "real possibility".

"US President Donald Trump is looking to pick a fight with the world’s second-largest economy, a fight he believes is easy to win, and China is willing to go toe to toe with the US even if it means inflicting harm at home. It’s hard to see how anyone wins in this but investors currently, despite the declines we’ve seen, are expressing confidence that a solution will be found before a full-blown trade war erupts."

On the data front, initial US jobless claims increased by 24,000 to 242,000 in the week ended 31 March, beating forecasts for a reading of 225,000, but were still relatively low when compared to recent years, reflecting the best labour market in decades.

Elsewhere, the US trade deficit rose 1.6% in February and remained at 10-year high, yet again highlighting the Trump administration's near impossible task of drastically reducing the gap, something the president had campaigned on quite heavily.

However, the main highlight of the week was still to come, on Friday, with the release of the monthly US non-farm payrolls report. Morgan Stanley's forecast called for the US labour market to have generated 180,000 new jobs in March and for the unemployment rate to hold steady at 4.1%.

The broker was also expecting to see a 0.2% monthly increase in average hourly earnings, raising the year-over-year rate to 2.7% from 2.6%.

In corporate news, JM Smucker was down 0.27% after saying late on Wednesday that it will pay nearly $2bn for pet food company Ainsworth Pet Nutrition.

Conatus Pharmaceuticals shares lost as much as 26.54% after its announcement regarding a failed drug study, while shares of Sonoma Pharmaceuticals gained as much as 15.60% after the Food and Drug Administration approved its antimicrobial skin gel.