Dow futures spiked sharply on Thursday's morning trading as China confirmed that there are plans to hold new rounds of negotiations with the United States. U.S. stock index futures hiked 201 points following the news.
According to CNBC, analysts are expecting a positive opening of over 209 points as both Nasdaq and S&P 500 futures traded higher than the previous days. The rallying of American markets is attributed to China's latest comments about the trade war.
The Chinese Commerce Ministry announced on Thursday morning that negotiators from both sides agreed to hold trade talks in Washington, D.C. in October. The efforts from delegations came amid increasing worries for the global economy.
By the end of August, new tariffs were slapped on Chinese and American products, further escalating the trade dispute that has been hurting consumers and businesses from both parties.
Investors are currently watching developments in the U.S. second-quarter reports that will be released later in the day. Another point of attention that markets are looking it is factory production numbers for July.
Asian stocks also showed significant improvements on Thursday's trading after news of the trade talks emerged. According to CNN, Japan's Nikkei gained 2.3 percent, the Shanghai Composite Index edged up 1.1 percent, and South Korea's Kospi soared by one percent.
Even European stocks went ballistic over the news, pulling up some stocks that were previously down due to the escalation last week. Analysts said the China-U.S. trade war truly has a massive effect on global markets.
Senior market analyst Oanda's Asia Pacific branch, Jeffrey Halley, noted that investors should still be watchful of what happens next despite the good news. He said a "concrete deal" needs to be put in place before outlooks for the global economy improve.
On the other hand, other experts view the news as something worth being optimistic for. Market strategist for the Asia Pacific at AxiTrader, Stephen Innes, argued that even the slightest improvement will be recognized by markets "in a very positive light."
A former official at the Chinese Commerce Ministry, Zhou Xiaoming, said both sides don't want to "be blamed by the rest of the world" for the trade dispute's impact on the global economy, Bloomberg reported.
Lower-level officials are also expected to hold talks this month as the two countries prepare for the bigger negotiations come October. The U.S. Trade Representative's office said their delegation will seek "meaningful progress" during the upcoming talks.
Before the talks for October were confirmed, politicians and global economists alike raised concerns about the Chinese and U.S. economies. They said a slowdown is now more apparent than ever and urged the world's largest economies to come to a resolution.
