US pre-open: Sino-US trade optimism to fuel more gains

US stocks looked set for more gains at the open on Thursday as optimism about Sino-US trade talks continued to underpin the mood.

At 1230 GMT, Dow Jones Industrial Average and S&P 500 were up 0.3%, while Nasdaq futures were 0.4% higher.

Oanda analyst Craig Erlam said US President Trump’s claim on Wednesday that negotiations were going "very well" and reports that a 60-day extension was being considered are "encouraging".

"This was always, realistically, the best possible outcome of these initial talks and I think we have to be pleased that this means two more months without new tariffs. The ultimate goal is for previous tariffs to be removed entirely but this is another important step towards that," Erlam said.

"It’s difficult to know exactly what impact the tariffs have had on the trade data so far, with figures suggesting there was some front-loading of Chinese exports prior to them being imposed. But data overnight - assuming it’s reliable - suggests they’re continuing to hold up well, with exports surging by 9.1% in January, smashing market expectations of a 3.2% decline. The timing of Chinese New Year always makes the data at the start of the year more difficult to interpret, which can lead people to take it with a pinch of salt."

Meanwhile, another partial government shutdown looked set to be avoided as Trump prepared to sign border-security legislation.

"The Senate is expected to vote on the proposed legislation today and this will be followed in short order by the House," said Rabobank. "A provision to provide back pay to federal contractors who did not receive pay during the most recent shutdown will not be included as agreement between the Democrats and Republicans on the issue could not be reached."

In corporate news, mattress manufacturer Tempur Sealy was in the red in pre-market trade as its fourth-quarter profit missed expectations.

Coca-Cola was also on the back foot after the release of weaker-than-expected fourth-quarter revenue, while Avon shares could be active after the cosmetics company posted a fourth-quarter loss and fell short in terms of revenue.

On the data front, retail sales, the producer price index and jobless claims are all due at 1330 GMT, while business inventories are at 1500 GMT.