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US pre-open: Futures point to modest gains despite civil unrest

By Iain Gilbert

Date: Tuesday 02 Jun 2020

US pre-open: Futures point to modest gains despite civil unrest

(Sharecast News) - Wall Street futures had stocks opening higher on Tuesday as market participants remained optimistic about the reopening of the US economy despite a wave of civil unrest spreading across the country.

As of 1230 BST, Dow Jones futures were up 0.67%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.57% and 0.60% firmer, respectively.

The Dow Jones closed 91.91 points higher on Monday after last week's gains helped major averages record their first back-to-back monthly advances since late 2019.

While futures briefly fell after Donald Trump threatened to deploy the US military to silence protesters if states and cities failed to do so, investors seemingly shrugged off their concerns shortly thereafter and continued to focus on the reopening of the nation's economy.

New York governor Andrew Cuomo said New York City would be placed under curfew from 2300 EDT Monday night through to 0500 EDT Tuesday morning in order to curb protests.

Heightened tensions between Washington and Beijing were also in focus as China requested state-owned companies to cease purchases of soybeans and pork from the US after the President said the White House would seek to revoke Hong Kong's favoured trade status due to a new security law passed by the Chinese parliament.

IG analyst Chris Beauchamp said: "Markets might even begin to view the situation as resulting in Trump pivoting towards being the 'law and order' candidate, given his statements last night, shifting his ground away from the economy on which he is now viewed as being much less strong thanks to the coronavirus pandemic.

"If such a pivot galvanises his base and bolsters his re-election chances, then markets may continue to gain if they view this as more preferable to the now more left-wing platform being espoused by Joe Biden."

On the macro front, the Institute for Supply Management's New York Index will be published at 1445 BST.

In corporate news, the likes of American Airlines, United Airlines and Southwest were all up more than 3% ahead of the bell.

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