US pre-open: Futures trade higher despite strained US-Sino relations
Wall Street futures were in the green ahead of the bell on Wednesday as strained US-Sino relations remained in focus.
As of 1220 BST, Dow Jones futures were up 0.42%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.46% and 0.49% firmer, respectively.
The Dow closed 402.23 points lower on Tuesday amid heightened US-China tensions amid House Speaker Nancy Pelosi's arrival in Taiwan.
Pelosi's controversial journey to Taiwan was still drawing an amount of investor attention early on Wednesday, with traders concerned that her trip would further strain already tense relations between the world's biggest economies after China spent weeks warning the House Speaker not to visit.
Comments from three Federal Reserve presidents that hinted that the central bank saw further rate hikes as being necessary if it were to fight high inflation were also in focus before the opening bell.
AvaTrade's Naeem Aslam said: "Interestingly, the US and European futures are trading higher as investors are feeling relieved that the response from China over Pelosi's visit to Taiwan was rather a muted one. Traders feared for a lot worse situation but in reality, what we had was just a military drill and some supply chain disruption. In all of this, the country which is going to gain or lose the most is Taiwan, and if we look at the local stock market, there is a lack of optimism there, and this means that international markets aren't pricing in the risk correctly yet. China isn't likely to sit quietly and let this event go with a small response.
"Nonetheless, US stock futures are trading higher and the focus for today is on the economic numbers, economic activity and the fresh comments from the Fed members. These factors are likely to drive the price action. While it is imperative for traders to keep a close eye on the volatility index as an abnormal activity, there could be an early clue that things are about to become sour."
In terms of earnings, Tupperware Brands, Under Armour, CVS Health, Revlon, and Moderna will report before the opening bell, while quarterly results from Booking Holdings, Hostess Brands, and Western Union will be published after the close.
On the macro front, US mortgage applications rose 1.2% in the final week of July, according to the Mortgage Bankers Association, the first increase in five weeks, with the refinance and purchase index advancing 1.5% and 1.0%, respectively.
Still to come, S&P Global's final July composite PMI will be published at 1445 BST, while the Institute for Supply Management's non-manufacturing PMI and June factory orders data will follow at 1500 BST.
Reporting by Iain Gilbert at Sharecast.com