US stocks expected to rise amid increased optimism for trade deal

U.S. stock index futures were higher on Friday on hopes the United States and China would begin efforts to resolve their trade dispute, but gains were capped by a strong monthly jobs data that raised concerns of faster interest rate hikes.

The Labor Department report showed U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in nine-and-half years, pointing to further tightening of the labour market that could encourage the U.S. Federal Reserve to raise interest rates again in December.

"The trend is still higher and it's still consistent with the Fed raising short-term interest rates, but perhaps a little bit more than the markets had expected before the report," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"This definitely raises expectations for a hike in December."

The prospect of higher borrowing rates was one of the factors, along with tariffs and slowing global growth, that triggered a tumble in the stock markets last month.

The markets got a boost on Friday after President Donald Trump and his Chinese counterpart Xi Jinping expressed optimism about resolving the trade dispute ahead of a high-stakes meeting at the end of November in Argentina.

Shares of trade-sensitive industrial bellwethers, Caterpillar Inc, Boeing Co and 3M Co, rose between 1.2 per cent and 2 per cent.

Futures were also under pressure as Apple's shares dropped 6.5 per cent in premarket trading, taking its market value below $1 trillion after the company warned that sales for the crucial holiday quarter would likely miss expectations.

That weighed on the tech-heavy Nasdaq, but the S&P and the Dow were set to rise for the fourth day in a row.

At 9:03 a.m. ET, Dow e-minis were up 221 points, or 0.87 per cent. S&P 500 e-minis were up 16.25 points, or 0.59 per cent and Nasdaq 100 e-minis were down 16.75 points, or 0.24 per cent.

Starbucks Corp climbed 7.4 per cent after the coffee chain reported same-store sales that beat estimates, benefiting from higher prices in the United States and a rebound in China.

Symantec Corp jumped 8 per cent after the cybersecurity firm topped profit and revenue estimates as revenue from its consumer security division rose.

Kraft Heinz Co dropped 5.7 per cent after the company missed quarterly earnings estimates on steep commodity costs.