US pre-open: Stocks set to start higher, despite gathering 'dark clouds'
Wall Street is set for a higher start on the back of a degree of optimism around the ongoing trade talks between China and the US.
A stronger-than-expected reading on the US trade deficit amid record levels of exports was also boosting sentiment.
However, in the wake of an unexpected interest rate hike by the central bank of India - one of the largest emerging markets - and following somewhat hawkish remarks by the European Central Bank's chief economist, some analysts were also carefully monitoring movements in the US Treasury market.
"Treasuries continue to await next week's FOMC decision but keeping an eye on trade and ongoing European political concerns. Choppy price action is likely to continue in the meantime as investors attempt to fine-tune rate hike pricing, keeping the front-end supported," said analysts at TD Securities.
On a related note, overnight the World Bank forecast that the rate of growth in global gross domestic product would cool over the next two years after reaching a clip of 3.1% in 2018.
More important, the World Bank said that protectionist threats continued to cast a "dark cloud" over future growth.
It also pointed to uncertainty around economic policy as a possible risk factor, together with the risk of a "credit event" in one of the major emerging markets or a sudden tightening of monetary policy in the US which might lead to a spike in interest rates.
Against that backdrop, overnight it was reported that China had signalled its willingness to boost its purchases of US-made goods in 2018 by between $25bn and $75bn.
In economic news, the Department of Commerce reported that the country's international trade deficit shrank by 2.7% month-on-month for April to reach -$46.2bn (consensus: -$49.0bn).
Meanwhile, according to the Bureau of Labor Statistics, unit labour costs in the US grew at an annualised pace of 2.9% over the first three months of the year (consensus: 2.7%).
On the corporate side of things, shares in Axovant Sciences were rocketing 106% after disclosing it had entered into a $842.5m licensing agreement with Oxford BioMedica for its OXB-102 gene therapy treatment for Parkinson-s disease.
Stock in Devon Energy on the other hand was being called to fall 2% at the opening bell, despite announcing the sale of its stakes in EnLink Midstream Partners and EnLink Midstream LLC, allowing it ramp-up its share buy-back programme from $1bn to $4bn.
Signet Jewelers' shares were climbing 9.83% after the company posted better-than-expected adjusted earnings per share and revenue figures.