Futures gain as initial U.S.-China trade deal cools tensions; Boeing dips

By Uday Sampath Kumar

(Reuters) – U.S. stock index futures rose on Monday as the top U.S. trade negotiator said a deal would nearly double exports to Beijing over the next two years, but Boeing was set to cap gains for the S&P 500 and on production concerns about its grounded jet.

Boeing Co (N:), which normally benefits from trade talk progress, fell 3.2% premarket. The planemaker is considering whether to cut or halt production of its grounded 737 MAX airliner, Reuters reported.

All three major stock indexes hit record highs on Friday after the world’s top two economies announced a much-awaited “phase one” agreement, but ended largely flat as investors looked for clarity on the actual text of the pact.

On Sunday, U.S. Trade Representative Robert Lighthizer said there would be some routine “scrubs” to the text, but that it was “totally done”, adding that the date to formally sign the agreement was being determined.

The preliminary deal suspended U.S. tariffs on $160 billion worth of Chinese imports scheduled to take effect on Dec. 15, and reduced some duties in exchange for increased purchases of U.S. agricultural, manufactured and energy products by Beijing.

Nasdaq futures hit an all-time high earlier on Monday, while S&P 500 futures hovered near record levels. The benchmark index is on track for its best annual performance since 2013, boosted in part by three interest rate cuts by the Federal Reserve and encouraging economic data.

At 7:15 a.m. ET, were up 44 points, or 0.16%. S&P 500 e-minis were up 12.25 points, or 0.39% and were up 36.75 points, or 0.43%.

Shares of International Flavors & Fragrances Inc (N:) fell 6.1% after it said it would merge with DuPont Inc’s (N:) $26.2 billion nutrition & biosciences unit. DuPont’s shares rose 4.5%.

Micron Technology Inc (O:) rose 2.8% and was the biggest gainer among chipmakers after Susquehanna raised its rating on the stock.

Investor attention now turns to Markit PMI surveys for the manufacturing and services sectors for December, due at 9:45 a.m. ET.

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