U.S. stock indexes were set to open higher on Wednesday after President Donald Trump’s abrupt call to end stimulus talks sent Wall Street tumbling in the previous session, while shares of Levi Strauss surged following a surprise quarterly profit.
Trump broke off negotiations with Democrats on more economic aid in a tweet on Tuesday, and promised a major stimulus bill if he wins the Nov. 3 presidential election.
The announcement sparked the worst session for the S&P 500 and the Dow in two weeks, while airlines sank 3% as the move appeared to scuttle $25 billion in new bailout for the industry.
Trump later urged Congress to instead pass a series of smaller, stand-alone bills that would target airlines, small businesses and give $1,200 stimulus checks to individuals.
Shares of Delta Air Lines Inc, American Airlines Group Inc, United Airlines Holdings Inc and JetBlue Airways Corp jumped between 3.4% and 6.4% in premarket trading.
“(The halt in stimulus talks) is unlikely to be the catalyst for a significant sell-off as most market participants were not anticipating that a deal will be reached ahead of the election anyway,” said Milan Cutkovic, market analyst at Axi Corp.
“Should there be no stimulus package announced shortly after the election, investors could get increasingly nervous about the economic recovery losing momentum.”
Attention later in the day will be on minutes of the Federal Reserve’s policy meeting in September, due to be released a day after Chair Jerome Powell called for more help for businesses and households to keep a nascent economic recovery from faltering.
Vice President Mike Pence and Democratic challenger Kamala Harris are also set to square off in their only debate, which comes less than a week after Trump contracted COVID-19 amid a White House outbreak that has infected numerous high-profile Republicans.
Reuters/Ipsos opinion polls released on Tuesday showed Democratic presidential candidate Joe Biden expanded his lead over Trump in battleground Michigan and the two candidates were locked in a toss-up race in North Carolina.
At 8:19 a.m. ET, Dow e-minis were up 226 points, or 0.82%, S&P 500 e-minis were up 27.5 points, or 0.82%, and Nasdaq 100 e-minis were up 98.5 points, or 0.87%.
Levi Strauss & Co jumped 13.2% and was on course to open at a four-month high as it said it planned to open new stores, in contrast to analysts' projections for it take a hit from coronavirus-driven store closures. The company reported a profit for the third quarter, defying expectations of a loss.
Shares of apparel retailer Gap Inc rose 3.0%.
Analysts expect earnings at S&P 500 firms to have dropped 21.3% in the third quarter, according to data IBES data from Refinitiv.
Still, the pace of declines is expected to have slowed following a 30.6% slump in the second quarter, when Corporate America took a hit from nationwide lockdowns.
Boeing Co gained 2.4% after the Federal Aviation Administration issued a draft report on revised training procedures for the planemaker's 737 MAX, a key milestone to the plane's eventual ungrounding.
Reporting by Sagarika Jaisinghani in Bengaluru