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Stock Futures Surge As Boeing, Nvidia Lead China-Fueled Rally

Global stocks markets and U.S. stock futures traded sharply higher ahead of Tuesday’s open, after China’s President Xi Jinping de-escalated the tone of the U.S.-China trade dispute.

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Nasdaq stock futures led the premarket rally, rising 1.7% Chip stocks topped the Nasdaq 100, led by Nvidia (NVDA), Microchip Technology (MCHP) and Micron Technology (MU). Apple (AAPL) and three of four FANG stocks traded more than 1% higher. Netflix (NFLX) led the pack with a 2.5% gain.

Futures for the Dow Jones industrial average scaled up 1.3% above fair value. Export-sensitive blue chips led the advance, with Boeing (BA), Caterpillar (CAT) and Intel (INTC) up more than 2% apiece. S&P 500 stock futures also swung 1.3% higher as chip stocks crowded the top of the list. But the largerst gain was from PNC Financial Services (PNC), which rose more than 6%.

Investors remain on watch for a follow-through day, a heavy-volume advance sufficient enough to kick the market’s status from “in correction” to “in confirmed uptrend.”

FBI Raid

Markets had attempted to rally on Monday, but pulled back from significant early gains following news that agents from the Federal Bureau of Investigation had raided offices of Michael Cohen, long-time personal attorney to President Trump. The search was executed as part of a probe by the U.S. attorney’s office in Manhattan.  Agents seized records related to payment of a former adult-film actress, linked to Federal prosecutors in Manhattan examining possible bank fraud by Mr. Cohen, according to the Wall Street Journal.

China’s Xi Jinping

China’s President Xi Jinping on Tuesday laid out a broad list of changes to open China’s economy, precisely the kind of concessions President Trump has called for while threatening a heavy load of tariffs on China-made products imported into the U.S. Mr. Xi pledged foreign companies more access to China’s financial and manufacturing sectors, reduce tariffs on imported autos and reduce limitations on foreign ownership of auto manufacturing in China.

The comments triggered a rally across China’s markets, with Hong Kong’s Hang Seng Index and the Shanghai Composite Index each rising 1.7%. In Japan, Tokyo’s Nikkei 225 notched a 0.5% advance.

Markets also ran higher across Europe, where Frankfurt’s DAX was up 1%, and the CAC-40 in Paris and London’s FTSE 100 were ahead 0.6% apiece hear midday.

Zuckerberg Testimony

Facebook (FB) co-founder and Chief Executive Mark Zuckerberg goes before a joint hearing of the Senate Commerce and Judiciary committees this morning. Topics will be Facebook user data and security policies, and questions related to the Cambridge Analytica scandal. A statement of Zuckerberg’s planned comments released yesterday said the company hadn’t done enough to protect user information, and planned to redouble efforts to more tightly manage “fake news, foreign interference in elections and hate speech, as well as developers and data privacy.”

Boeing, Nvidia Stake Out Early Lead

Boeing powered up 3.1% in premarket trading. Indonesia’s Lion Air Group announced Tuesday plans to purchase 50 Boeing 737 Max 10 aircraft. Tuesday’s agreement adds to Lion Air’s 201 aircraft already on order. Deliveries are expected to begin in 2020. Boeing shares continue to consolidate below their 10-week moving average, as they look to start up the right side of a seven-week base pattern.

Graphics chip leader Nvidia powered up 3.6% to lead both the Nasdaq 100 and the IBD list of leading growth stocks. Chip equipment maker Lam Research (LRCX), also an IBD 50 stock, jumped 3.2% ahead of the open. Both Nvidia and Lam were named in a research report Monday which detailed buying opportunities in the bruised chip sector.

Nvidia is pulled back a nominal 15% from its mid-March high. Lam Research is 18% off its high, a pullback that triggered the automatic sell rule following an early-March breakout.

China Stocks: Weibo, Baozun, Sina

Among China-based stocks, Weibo (WB), Baozun (BZUN) and Sina (SINA) all jumped more than 3% in premarket action.

Micro-blogging leader Weibo popped 3.7% as it looks to add another gain to its rebound from support at its 200-day line, and to regain support at its 50-day average.

Baozun, a platform provider for e-commerce players in China, gained 3.6%. The IBD 50 stock ended just below a new high on Monday, and extended above a 40.75 cup base buy point.

Sina also gained 3.6%. Its shares are working to recover after tumbling below their converged 10- and 40-week moving averages in heavy trade during a four-week dive.

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