US pre-open: Stocks to edge up amid trade optimism; FOMC minutes eyed

US stocks looked set to edge higher at the open on Wednesday amid optimism that the US and China will come to an agreement on trade.

At 1150 GMT, Dow Jones Industrial Average and Nasdaq futures were up 0.3%, while S&P 500 futures were 0.2% firmer.

Investors seemed to be taking heart from the fact that negotiations between the US and China went on for a day longer than expected, with a statement on the talks due soon.

US Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs, Ted McKinney, said earlier that the negotiations "went just fine".

Spreadex analyst Connor Campbell said: "Now that the talks in Beijing have officially come to a close - one day later than expected, something that has been treated as hugely significant - investors are on tenterhooks to know what, if anything, was agreed between the two superpowers. So far there isn’t a lot to go on; however, the signs appear to be positive."

The government shutdown, which is now well into its third week, remained in focus as Fitch warned that the US could lose its triple-A credit rating later this year if the shutdown negatively affects the country's debt ceiling.

Investors will be looking ahead to the latest minutes from the Federal Open Market Committee at 1900 GMT.

Oanda analyst Craig Erlam said they should be an interesting read, given the clear reluctance within the committee to dramatically alter the course for interest rates at the meeting, followed a couple of weeks later by its Chair delivering a much more flexible, dovish message.

"At the December meeting, the committee reduced its forecasts for rate hikes this year from three to two but some were expecting it to go further. Powell’s recent comments would suggest it won’t take much," said Erlam.

"Markets have gone one step further and priced in no more hikes this year, with the odds of one at times being as low as 0%. These expectations have pared slightly but even now, a hike is only slightly priced in, with the rebound in markets taking the edge off the growing pessimism. This has naturally been helped by some good economic data on Friday and efforts to resolve the trade war."

On the corporate front, Apple shares could be active following a report that the tech giant is cutting its iPhone production by 10% between January and March. According to the Nikkei Asian Review, Apple told its suppliers last month to make fewer new iPhones than was initially planned for the March quarter.