“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA wants to help China, not hurt it!!!”
WTI crude oil soared 3.19% to $59.44 in morning trading, partially reversing Friday’s 5.32% plunge to $57.70. A full-blown US-China trade war could weigh heavily on global trade flows and demand for commodities such as oil.
The weekend de-escalation came ahead of the highly anticipated APEC Summit, where President Trump is expected to meet President Xi. Markets are hoping for a trade deal from the meeting.
China Exports Rebound as Trade Tensions Abate
While easing US-China trade tensions lifted sentiment, China’s economy faced early scrutiny in the Monday session. Chinese Exports soared 8.3% year-on-year in September, after rising just 4.4% in August. Meanwhile, imports surged 7.4%, up sharply from 1.3% in August, signaling strong demand.
September’s data came ahead of this month’s APEC Summit, where traders expect President Trump and President Xi to ink a trade deal.
How Are US Stock Futures Reacting to Trade Developments?
US stock futures rallied in morning trading on Monday, October 13, partially reversing Friday’s losses. The Dow Jones E-mini climbed 411 points, the Nasdaq 100 E-mini gained 423 points, and the S&P 500 E-mini advanced 84 points.
Later on Monday, Fed speakers could influence demand for US stock futures. Expectations of October and December Fed rate cuts sent US stock futures to early October record highs. Stronger Fed support for aggressive monetary policy easing would likely boost demand for risk assets.
On the other hand, Fed concerns about sticky inflation could signal a less dovish Fed rate path, weighing on sentiment.
The Nasdaq 100 E-mini and the S&P 500 E-mini will likely be more sensitive to Fed chatter. This is because of the influence of borrowing costs on earnings for capital-intensive companies.
Meanwhile, traders should closely monitor Capitol Hill, since the government shutdown has extended to 13 days.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
Following the morning rallies, US stock futures traded above the 50-day and 200-day Exponential Moving Averages (EMAs), reaffirming bullish momentum.
However, the near-term outlook hinges on US-China trade developments, the Senate impasse, and Fed commentary. Key levels traders should monitor include:
Dow Jones
- Resistance: 46,500, 47,000, the October 3 record high of 47,323.
- Support: 46,000, the 50-day EMA (45,801).