Wall Street was set to bounce back on Tuesday, as China stepped in to steady the yuan and investors sought beaten-down technology stocks, a day after Wall Street’s main indexes racked up their steepest one-day percentage fall of the year.
The benchmark S&P 500 and Nasdaq lost at least 3pc each on Monday, their sixth straight day of losses, as China let the yuan drop sharply in what was seen as a retaliation to President Donald Trump’s threat to slap a new round of tariffs on Chinese imports last week.
Fears of an escalating trade war were fanned further after US Treasury Department labeled Beijing a currency manipulator late on Monday.
“The fact that China stabilized its currency gives investors some hope that this won’t accelerate into a bigger problem,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“Any positive response by either side that suggests some willingness to negotiate is really going to be taken well by investors.”
At 8:28 a.m. ET, Dow e-minis were up 218 points, or 0.85pc. S&P 500 e-minis were up 24.25 points, or 0.86pc and Nasdaq 100 e-minis were up 75.75 points, or 1.03pc.
Of the 30 Dow Jones Industrial components, 29 were trading higher before the bell.
Shares of technology companies, which have a big exposure to China, were also higher.
Apple Inc rose 1.0pc after three days of heavy losses, while shares of semiconductor companies – Intel Corp , Advanced Micro Devices Inc and Nvidia Corp – rose between 1.1pc and 2pc.
Industrial bellwethers Boeing Co and Caterpillar Inc rose about 0.6pc each.
Among other stocks, videogame publisher Take-Two Interactive Software Inc jumped 7.1pc after raising its full-year revenue forecast.
Payments processor Mastercard Inc gained 1.7pc after it said it would buy a majority of the corporate services businesses of European payments company Nets for about $3.19 billion.
Walt Disney Co was up 1.3pc. The company is set to report its third-quarter results after market close.
The latest streak of losses has pulled the S&P 500 about 6pc away from its all-time high hit last month.