U.S. equity futures were trading higher early Tuesday, pointing to a firmer open on Wall Street and suggesting that stocks could build on the gains recorded in the previous session.
Early momentum is being fueled in part by a sharp rally in Palantir Technologies (NASDAQ:PLTR). Shares of the AI-driven software company were up about 11.7% in premarket trading after the company reported fourth-quarter results that beat expectations and issued an upbeat outlook.
Mining shares are also expected to see early gains, as gold and silver prices have rebounded sharply following a recent selloff, improving sentiment across the materials space.
That said, investor enthusiasm could be somewhat restrained as attention turns to Washington, where the House of Representatives is scheduled to vote on a funding measure aimed at ending the partial government shutdown.
The shutdown has already led the Labor Department to postpone the release of the job openings report due this morning, as well as the closely watched monthly employment report that had been set for release on Friday.
After a mixed showing last week, U.S. stocks finished mostly higher on Monday. All three major indices advanced, with the Dow leading the way. Although the averages pulled back from their session highs late in the day, they remained solidly in positive territory. The Dow gained 515.19 points, or 1.1%, to close at 49,407.66, the Nasdaq rose 130.29 points, or 0.6%, to 23,592.11, and the S&P 500 added 37.41 points, or 0.5%, to 6,976.44.
The rally was underpinned by fresh data from the Institute for Supply Management, which showed U.S. manufacturing activity unexpectedly returned to growth territory in January for the first time in a year. The ISM manufacturing PMI climbed to 52.6 from 47.9 in December, well above the 50 mark that signals expansion and comfortably ahead of forecasts calling for 48.5.
The stronger-than-expected data helped investors look past lingering trade frictions and renewed uncertainty around the path of U.S. monetary policy. Market sentiment was also lifted by signs of easing tensions between the U.S. and Iran, following reports that Tehran is open to renewed negotiations with Washington over its nuclear program.
Stocks received additional support after President Donald Trump said on Truth Social that the U.S. had reached a trade agreement with India. Following a conversation with Indian Prime Minister Narendra Modi, Trump said reciprocal U.S. tariffs on Indian goods would be reduced to 18% from 25%, while India would reportedly cut both tariff and non-tariff barriers on U.S. products.
Despite the generally positive tone, traders appeared hesitant to take larger positions ahead of Friday’s release of the Labor Department’s monthly jobs report. The report is expected to show that U.S. payrolls increased by 70,000 in January, following a gain of 50,000 in December, and could influence expectations for interest rates.
From a sector perspective, airline stocks were among the strongest performers, with the NYSE Arca Airline Index jumping 4.3%. Computer hardware stocks also rallied, as reflected in a 4.2% rise in the NYSE Arca Computer Hardware Index.
Banks, semiconductor shares and retailers also posted solid advances, while energy stocks lagged the broader market amid a sharp drop in crude oil prices.
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