Dow futures jump 250 points as focus remains on trade and the economy

U.S. stock index futures were set to open sharply higher on Friday morning as investors continued to focus on movements in the bond market and U.S.-China trade talks.

Around 5:30 a.m. ET, Dow futures indicated a positive open of about 250 points. Futures on the S&P and Nasdaq were also both solidly higher.

Wall Street closed Thursday’s session on a more positive note, erasing some of the steep losses suffered earlier in the week. Market sentiment remains volatile, however, as concerns about the softening global economy and U.S.-China trade talks kept investors on edge.

Investor sentiment turned more negative when the U.S. Treasury yield curve inverted — a market phenomenon often considered a recession indicator. An inverted yield curve marks a point where short-term investments in U.S. Treasury bonds pay more than benchmark long-term bonds. The U.S. 30-year Treasury yield dropped to a record low on Thursday, while the yield on the benchmark 10-year notes dipped to a three-year low, as investors sought out safe-haven assets.

Speaking to CNBC in Asia, Ray Dalio, founder of the world’s largest hedge fund, said that there’s a 40% chance that the U.S. will experience a recession before the 2020 election.

Meanwhile, President Donald Trump said Thursday that he believed the U.S.-China trade dispute would be relatively short, adding China wanted to make a trade deal. His comments came after Beijing promised it would counter the latest tariffs on $300 billion of Chinese goods but urged the U.S. to meet halfway in order to secure an agreement.

On the data front, a reading on housing starts and building permits is due at 8:30 a.m. ET. Consumer sentiment numbers will be released at 10 a.m. ET. And OPEC is also expected to publish its monthly report.

In corporate news, there are very few companies reporting. Deere will be updating investors before the bell.

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