US pre-open: Stocks seen higher on trade deal hopes

US futures were pointing to some modest gains ahead of the bell on Friday as market participants digested news that the US and China had agreed a 'phase one' trade deal in principle.

As of 1230 GMT, Dow futures were up 0.44%, while S&P 500 and Nasdaq-100 futures were ahead 0.39% and 0.49%, respectively.

The Dow closed 220.75 points firmer on Thursday, while the S&P 500 and Nasdaq saw out the session at record highs amid reports that Washington and Beijing had reached a deal to avoid fresh punitive tariffs planned by the Trump administration for 15 December.

Futures had stocks going green at the open after CNBC reported that China and the US had agreed to a phase one trade deal in principle.

The report suggested that a deal would delay the imposition of tariffs and halve those on $360bn-worth of Chinese imports that have already been imposed - indicating that a major de-escalation in the trade war may be just around the corner.

Both Bloomberg and Dow Jones later reported that the President had signed off on the deal.

Oanda analyst Craig Elam said: "Trump looks poised to sign a phase one trade agreement with China ahead of the tariff deadline this Sunday.

"While markets are trading higher on the back of these reports, there is an element of caution about the moves we've seen so far. Investors have been too eager before to buy into a trade deal and may be a little reluctant to be so again but should this get over the line, this year's Santa rally may really take off."

Attention was also likely to shift across the pond after the Conservative Party's landslide win the UK general election sent stocks and sterling surging.

On the data front, retail sales for November will be out at 1330 GMT, while business inventories for October will follow at 1500 GMT.

No major corporate earnings were set to be released on Friday.