The major U.S. index futures are pointing to a higher opening on Thursday, with stocks likely see further upside following the rebound seen over the course of the previous session.
Early buying interest may be generated amid indications China is seeking to de-escalate the trade war with the U.S.
Chinese Ministry of Commerce spokesman Gao Feng indicated that China does not currently intend to retaliate against President Donald Trump?s latest threat to raise the rate of tariffs on Chinese imports.
?We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with calm attitude,? Gao said, according to a CNBC translation.
Gao claimed China has plenty of countermeasures it could impose but will instead focus on removing Trump?s new tariffs, which were announced after China said it plans to impose tariffs on $75 billion worth of U.S. goods.
?The most important thing at the moment is to create necessary conditions for both sides to continue negotiations,? Gao told reporters during a weekly briefing.
After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Wednesday. The rebound reflected a reversal from Tuesday, when stocks turned lower after seeing initial strength.
The major averages all climbed firmly into positive territory, with the Dow outperforming its counterparts. While the Dow jumped 258.20 points or 1 percent to 26,036.10, the Nasdaq rose 29.94 points or 0.4 percent to 7,856.88 and the S&P 500 climbed 18.78 points or 0.7 percent to 2,887.94.
Energy stocks helped to lead the markets back to the upside, benefiting from a notable increase by the price of crude oil.
Crude for October delivery pulled back off its highs of the session but still climbed $0.85 to $55.78 a barrel following the release of a report showing a steep weekly drop in crude oil inventories.
The report from the Energy Information Administration said crude oil inventories tumbled by 10.0 million barrels in the week ended August 23rd compared to estimates for a decrease of 2.1 million barrels.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index spiked by 3.6 percent, the NYSE Arca Natural Gas Index surged up by 2.4 percent and the NYSE Arca Oil Index advanced by 1.7 percent.
Significant strength also emerged among transportation stocks, as reflected by the 1.8 percent jump by the Dow Jones Transportation Average.
Steel, financial, and networking stocks also showed notable moves to the upside on the day, moving higher along with most of the other major sectors.
The rebound on Wall Street also came as bond yields climbed off their worst levels of the session, although they remained negative.
Earlier in the day, the negative spread between the ten-year and two-year yields widened to its lowest level since 2007, with an inverted yield curve widely seen as an indicator that a U.S. recession is looming.
The White House has sought to downplay recession concerns, although the inverted yield curve combined with the escalating U.S.-China trade war have generated considerable uncertainty on Wall Street.
US Economic Reports
The Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended August 24th.
The report said initial jobless claims inched up to 215,000, an increase of 4,000 from the previous week?s revised level of 211,000.
Economists had expected jobless claims to climb to 215,000 from the 209,000 originally reported for the previous week.
A separate report released by the Commerce Department showed the pace of growth in U.S. economic activity slowed by slightly more than initially estimated in the second quarter.
The Commerce Department said gross domestic product increased by 2.0 percent in the second quarter compared to the previously reported 2.1 percent growth. The downward revision came in line with economist estimates.
The downwardly revised GDP growth seen in the second quarter compares to the 3.1 percent jump in GDP reported for the first quarter.
At 10 am ET, the National Association of Realtors is due to release its report on pending home sales in the month of July. Pending home sales are expected to come in unchanged in July after jumping by 2.8 percent in June.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
The Treasury Department is scheduled to announce the results of its auction of $32 billion worth of seven-year notes at 1 pm ET.
Stocks in Focus
Shares of Dollar General (DG) are moving sharply higher in pre-market trading after the discount retailer reported better than expected second quarter results and raised its full-year guidance.
Fellow discount retailer Dollar Tree (DLTR) may also see initial strength after reporting second quarter sales that beat analyst estimates.
On the other hand, shares of Best Buy (BBY) are seeing pre-market weakness after the consumer electronics retailer reported better than expected second quarter earnings but weaker than expected sales.
Apparel retailer Abercrombie & Fitch (ANF) may also come under pressure after reporting second quarter sales that missed estimates and cutting its full-year sales forecast.
