Dow futures up 300 points after Biden hints that China tariffs could be reconsidered

The Dow Jones Industrial Average
DJIA,
+0.03%
saw its eighth straight weekly decline, marking its longest losing streak since April 1932, according to Dow Jones Market Data. The S&P 500 and Nasdaq Composite
COMP,
-0.30%
each suffered seven straight weekly losses, their longest losing stretch since March 2001.

What’s driving the markets?

Stock futures were rising from late Sunday, though off earlier highs.

Investors appeared ready to buy a market beaten down by weeks of selling. That was despite reports of surging COVID cases in Beijing. where officials extended an order for students and workers to stay home and will carry out more mass testing in the nation’s second-largest city.

Analysts attributed equity index futures gains to comments by President Joe Biden, who said China tariffs imposed during the Trump administration were under consideration and would be discussed with Treasury Secretary Janet Yellen upon his return to the U.S.

Biden also said the U.S. would defend Taiwan from any aggression by China.

Read: In Tokyo, Biden set to launch new Indo-Pacific trade pact to replace TPP

“U.S. noises in Asia, particularly comments about the tariffs, maybe kindled some fleeting optimism in the market but it’s going to take more than this to reset the bear market, albeit the S&P 500 is now trading below its 10-year average PE [price earnings] for the first time since March 2020 and cash levels are extremely high,” said Neil Wilson, chief market analyst for Markets.com, in a note to clients.

Read: Buy the dip or sell the ‘rip’?: What’s ahead for stock investors as ‘sticky’ inflation fears heighten consumer concern

Appetite for risk was weighing on the dollar. The ICE Dollar Index
DXY,
-0.79%,
which measures the greenback against a basket of major currencies, dropped 0.5%. Oil prices
CL00,
+0.61%
were modestly higher. Gold prices
GC00,
+0.58%
rose nearly 1% as the dollar pulled back.

There is no U.S. economic data on the calendar for Monday, but investors will keep an eye on the World Economic Forum in Davos, Switzerland, which is back after a two-year absence.

Read: Davos’ post-COVID return laden with climate, economic woes and a war in Europe

What companies are in focus?

• Shares of VMware Inc.
  VMW,
  +0.80%
  jumped 22% after reports chip maker Broadcom Inc.
  AVGO,
  -0.55%
  was in talks to buy the enterprise cloud-computing company.

How are other assets trading?

• The yield on the 10-year
  TMUBMUSD10Y,
  2.836%
  note was up 3 basis points to 2.823%, while that of the 2-year
  TMUBMUSD02Y,
  2.616%
  note was up 3 basis poitns to 2.603%.

• The ICE Dollar Index
  DXY,
  -0.79%,
  a measure of the currency against a basket of six major rivals, fell 0.8%

• Bitcoin
  BTCUSD,
  +1.76%
  was modestly higher at $30,470

• Oil futures
  CL.1,
  +0.60%

  CL00,
  +0.61%
  rose, with West Texas Intermediate crude for the most active July contract rising 1% to $111.42 a barrel.

• Gold futures
  GC00,
  +0.58%
  were also higher, with gold for June delivery
  GCM22,
  +0.58%
  up $1 to $1,862 an ounce.

• In European equities, the Stoxx Europe 600
  SXXP,
  +0.70%
  rose 0.7%, while the FTSE 100
  UKX,
  +1.20%
  rose 1.1%.

• In Asia, the Shanghai Composite
  SHCOMP,
  +0.01%
  finished flat, while the China CSI 300
  000300,
  -0.58%
  fell 0.5% and Hong Kong’s Hang Seng Index
  HSI,
  -1.19%
  fell 1.1%. Japan’s Nikkei 225 index
  NIK,
  +0.98%
  rose 0.9%.