Wall Street’s major indexes were expected to open higher on Tuesday as strong forecasts from Home Depot and United Airlines added to an upbeat global mood driven by hopes of an easing crackdown on tech companies and COVID-19. in China.
Big tech and growth companies led the rebound in premarket trading, with Microsoft Corp, Apple Inc, Nvidia Corp and Tesla Inc up 1.5% to 2.3%.
Home Depot Inc gained 3.9% after raising its full-year sales forecast on firm demand for home improvement tools and building materials.
United Airlines Holdings Inc rose 4% after the carrier raised its revenue forecast for the current quarter, boosting shares of Delta Air, American Airlines and Spirit Airlines.
“If you’ve exhausted the sellers, there’s no one left to sell…the market has really taken a beating,” said Mimi Duff, senior client advisor at investment advisory firm GenTrust.
“So at the very sight of any good news, you can bounce back, but what we’re really looking for is consolidation.”
Meanwhile, U.S. retail sales rose sharply in April as consumers bought motor vehicles amid improving supply and patronized restaurants, showing no signs of slowing demand despite high inflation.
But rising costs weighed on the Dow component Walmart Inc, which fell 6.3% after the retail giant cut its full-year profit forecast, signaling a bigger hit to margins.
Shares of rival retailers Costco, Target and Dollar Tree fell between 0.5% and 1.8%.
In Europe and Asia, stocks surged as Shanghai hit the long-awaited milestone of three consecutive days with no new COVID-19 cases outside quarantine zones, raising hopes restrictions could be eased.
Chinese companies listed on U.S. indexes also rose on signs that China is seeking to ease a regulatory crackdown on the tech sector after Vice Premier Liu He told executives that government-market relations had to be “properly managed”.
A positive first-quarter earnings season was overshadowed by concerns over the war in Ukraine, soaring inflation, China’s COVID-19 lockdown and aggressive central bank policy tightening.
The S&P 500 is down 3% and the Nasdaq 5.5% so far in May, due to losses in growth stocks.
A slew of Federal Reserve policymakers, including Chairman Jerome Powell, are expected to speak later in the day and their comments would be analyzed for clues on the trajectory of future interest rate hikes.
Traders now see an almost 80% chance of a 50 basis point rate hike in June.
As of 8:46 a.m. ET, Dow e-minis were up 419 points, or 1.3%, S&P 500 e-minis were up 62.25 points, or 1.55%, and e-minis Nasdaq 100 were up 221.75 points, or 1.81%.
Among other stocks, Advanced Micro Devices gained 3.7% after Piper Sandler upgraded the semiconductor designer’s stock to “overweight”.
Citigroup jumped 5.2% after Warren Buffett’s Berkshire Hathaway disclosed a nearly $3 billion investment in the US lender. Take-Two Interactive Software gained 5.4% after publisher “Grand Theft Auto” posted an upbeat fourth-quarter profit.
(Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Arun Koyyur)