US stock index futures join global rally on easing trade concerns

U.S. stock index futures jumped around 2 per cent on Monday, set to add to last week's strong gains after the United States and China declared a temporary trade truce.

Strong gains in Apple and other technology stocks pushed Nasdaq futures up more than 2 per cent, while S&P 500 e-minis touched a nearly 1-month high. Gains in Dow futures set the blue-chip index up for a more than 400-point gain at the open.

Washington and Beijing agreed to a 90-day trade ceasefire during the G20 summit in Argentina on Saturday and U.S. President Donald Trump said China has agreed to "reduce and remove" tariffs below the 40 per cent level that the country is currently charging on U.S.-made vehicles.

However, the White House also said that the existing 10 per cent tariffs on $200 billion worth of Chinese goods would be lifted to 25 per cent if no deal was reached within 90 days.

The trade optimism spilt over to Apple Inc, which gained 3.4 per cent in premarket trading.

Trump had said last week that the next round of tariffs could also be placed on the company's iPhones, as part of the $267 billion lists of goods not yet hit by tariffs.

Trade-sensitive Caterpillar Inc, Boeing Co gained over 4 per cent, while U.S. carmakers, General Motors Co, Ford Motor Co and Tesla Inc rose between 3.6 per cent and 4.2 per cent.

Shares of energy companies also rose as oil prices surged, helping lift Exxon Mobil Corp up by 2.4 per cent and Chevron Corp by 2.5 per cent.

"This trade news, although somewhat conflicting was in line with our expectations and is likely to induce a year-end rally of more than 5 per cent," Peter Cardillo, chief market economist at Spartan Capital Securities said in a client note.

At 7:27 a.m. ET, Dow e-minis were up 452 points, or 1.77 per cent. S&P 500 e-minis were up 40.5 points, or 1.47 per cent and Nasdaq 100 e-minis were up 157.25 points, or 2.26 per cent.

After being hammered for much of the past two months, Wall Street posted its biggest weekly gain last week in nearly seven years on hopes that a detente could be reached over trade between the world's top two economies and futures added to gains from Sunday.

Shares of U.S. chipmakers, which have the highest revenue exposure to China, rose led by a 4.8 per cent gain in Micron Technology Inc and a 5 per cent rise in Advanced Micro Devices Inc.

U.S.-listed Chinese stocks rallied, with heavyweights Alibaba Group Holdings Ltd, JD.com Inc and Baidu Inc all up above 4.5 per cent.

The Institute for Supply Management (ISM) report due at 10 a.m. ET (1500 GMT) is expected to show its index of national factory activity fell to a reading of 57.6 last month from 57.7 in October.