Stock futures higher after China affirms 90-day trade truce deadline

U.S. equity futures rose Wednesday after Beijing acknowledged the 90-day deadline set by President Trump and Chinese President Xi Jinping to find a solution to the two nations' trade dispute.

Both the New York Stock Exchange and the Nasdaq were closed Wednesday in observance of the Day of Mourning declared by President Trump for the death of former President George H.W. Bush. Trading will resume Thursday.

The futures gains come after the Dow Jones Industrial Average plummeted 799 points Tuesday in a massive equity rout that stemmed from worries about the health of the U.S. economy and uncertainty about what exactly the leaders of the two largest economies agreed to at the G-20 meeting in Argentina.

In addition, Trump tweeted that he is "Tariff Man" and Chinese officials did not publicly acknowledge the truce period, leaving investors nervous.

Further, Larry Kudlow, Trump’s top economic adviser, said Monday the truce would begin Jan. 1, 2019, but the White House then said the 90-day period had begun Dec. 1.

But that all changed early Wednesday when Beijing issued a positive statement on the length of the truce period.

“The economic and trade teams of the two sides will actively promote the consultation work within 90 days in accordance with a clear timetable and road map … and the sooner the better,” the China Ministry of Commerce said in a statement early Wednesday.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 32030.11 -530.49 -1.63%
SP500 S&P 500 3936.97 -65.90 -1.65%
I:COMP NASDAQ COMPOSITE INDEX 11669.955646 -190.15 -1.60%

That 90-day truce is designed to give time to resolve trade issues ranging from forced technology transfers, intellectual property protection, non-tariff barriers, cyber theft and agriculture practices.

The upshot was an approximately 3 percent drop in U.S. stocks on Tuesday.

Meanwhile Wednesday global stocks were mostly lower.

China's Shanghai Composite was off 0.61 percent, the Hang Seng fell 1.62 percent, Japan's Nikkei 225 declined 0.53 percent.

In Europe, the Stoxx Europe 600 index was down 1.2 percent, Germany's DAX 30 index fell 1.4 percent and the French CAC declined 1.4 percent.