US stock futures point to arise on deal to save NAFTA as trilateral pact with Mexico

U.S. stock futures pointed to arise on Monday after the United States and Canada clinched a last-minute deal to save NAFTA as a trilateral pact with Mexico, boosting hopes for progress in talks with other countries at the start of the fourth quarter.

The relief lifted world markets and sent the Mexican peso and the Canadian dollar to new peaks after the new United States-Mexico-Canada Agreement (USMCA) rescued a $1.2 trillion open-trade zone on Sunday.

U.S. President Donald Trump coerced Canada and Mexico into accepting more restrictive commerce with their main export partner in a deal that will make it harder for global automakers to build cars cheaply in Mexico and aims to bring more jobs to the United States.

Shares of Ford advanced 1.4 per cent, while General Motors gained 1.6 per cent.

Trump's primary objective in reworking NAFTA was to bring down U.S. trade deficits, a goal he has also pursued with China, by imposing hundreds of billions of dollars in tariffs on imported goods from the Asian giant.

Among stocks, Tesla shares jumped 15.4 per cent premarket after Elon Musk agreed to step down as the company's chairman, but remain as chief executive in a settlement with the U.S. Securities and Exchange Commission on Saturday.

Chipmakers were among early losers, with Intel down 1.9 per cent after Barclays downgraded the chipmaker, saying it would face a costly battle to keep market share amidst a near-term slowing of its end markets.

AMD fell 1.9 per cent after Baird cut its rating to "neutral".

Adding to the positive sentiment were oil prices, near their four-year highs over supply concerns ahead of imminent U.S. sanctions against Iran. This lifted Chesapeake shares 1.78 per cent.

At 7:01 a.m. ET, Dow e-minis were up 205 points, or 0.77 per cent. S&P 500 e-minis was up 17.25 points, or 0.59 per cent and Nasdaq 100 e-minis were up 54.75 points, or 0.72 per cent.

This weekends with the Labour Department's non-farm payrolls report and focus may also shift towards the start of the financial reporting season later this month.

Bolstered by a growing economy, deep corporate tax cuts and increased stock buybacks, S&P 500 companies are expected to post 21.6 per cent increase in earning per share from a year earlier, according to Thomson Reuters I/B/E/S.

ISM's national factory activity index at 10:00 a.m. ET is expected to show a dip to a reading of 60.3 in September from 61.3 in August, still showing the economy growing strongly.

Separately, the U.S. Commerce Department is forecast to report that construction spending increased 0.5 per cent in August after edging up 0.1 per cent in July.

(With inputs from agencies.)