US pre-open: Futures point to small gains as China opens up to partial trade agreement

US futures had stocks opening higher on Wednesday after reports circulated that Beijing was open to a partial trade deal with Washington.

As of 1230 BST, Dow futures were ahead 191.0 points, while S&P 500 and Nasdaq futures had the indices opening 24.50 and 71.50 points firmer, respectively.

The Dow closed 313.98 points lower on Tuesday with stocks on Wall Street closing firmly lower yet again after the US expanded its trade blacklist to include China's top artificial intelligence firms.

However, sentiment was lifted slightly ahead of the bell on Wednesday following a report from Bloomberg indicating that China was open to a limited tariff resolution with the US but which also said that Beijing would not move on certain major sticking points.

A separate report from the Financial Times stated that China had already offered to increase purchases of agricultural products from US farmers by 50% to $50bn.

High-level trade negotiations between both nations were set to begin in Washington on Thursday but an unnamed Chinese official told Bloomberg that negotiators were not optimistic about securing a broad agreement to fully end the trade conflict.

London Capital Group's Jasper Lawler said: "This week's US-China trade talks now look over before they've even began so markets are re-evaluating the chance of progress.

"It's now priced in that positions have hardened on either side so investors have dimmed the selling while they wait for the talks to begin."

On the data front, an unexpected drop in mortgage interest rates saw refinancing demand surge over the week ending on 4 October, pushing total mortgage application volumes up 5.2%, according to the Mortgage Bankers Association.

Volume was 69% higher year-on-year, while average contract interest rates for 30-year fixed-rate mortgages decreased to 3.90% from 3.99%.

Still to come, JOLTS job openings figures for August will be published at 1500 BST, as will wholesale trade numbers.

Minutes from the Federal Open Markets Committee's meeting on 18 September will be released at 1900 BST.

In Fed speak, chairman Jerome Powell will take part in a Fed Listens even in Kansas City at 1530 BST.

No major corporate earnings were slated for release on Wednesday.