Investing.com - Here are the top five things you need to know in financial markets on Tuesday, July 3:
1. Trump Moves To Block China Mobile's U.S. Entry
The U.S. government has moved to block China Mobile from offering services to the U.S. telecommunications market, recommending its application be rejected because the firm posed national security risks.
State-owned China Mobile (HK:0941) is the world's largest telecom carrier with 899 million subscribers.
Chinese foreign ministry spokesman Lu Kang, in response to a question about China Mobile at a daily briefing earlier today, said: "We urge the relevant side in the United States to abandon Cold War thinking and zero-sum games."
The move by U.S. President Donald Trump's administration to block China Mobile comes amid growing trade frictions between the two countries. The U.S. is set to impose tariffs on $34 billion worth of goods from China on Friday, which Beijing is expected to respond to with tariffs of its own.
2. Late-Session Rally In China Soothes Markets
China’s stocks clawed back losses in afternoon trading, and the yuan turned higher after sinking through a key level, spurring speculation that the People's Bank of China (PBOC) stepped up efforts to calm jittery financial markets.
The Shanghai Composite ended 0.4% higher by the end of the day, after earlier plunging as much as 1.9% to a new two-year low.
Meanwhile, the yuan reversed higher after sliding through the 6.70-level per dollar, where traders and analysts had expected intervention from the central bank. It last traded at 6.6472 per dollar after earlier falling to 6.7161 (USD/CNY).
PBOC Governor Yi Gang reiterated earlier that China will keep the currency stable at an equilibrium level. That, and comments by another PBOC official earlier in the day, are the first clear statement on the currency by the central bank since the yuan slump intensified in mid-June.
Recent market action has suggested that so far China has been the big loser from the escalating trade conflict between the world's two largest economies.
3. Dow Futures Rise 100 Points
U.S. stock futures pointed to a higher open, in what will be an abbreviated session ahead of the July 4th holiday.
At 5:30AM ET, the blue-chip Dow futures were up 100 points, or around 0.4%, the S&P 500 futures rose 9 points, or 0.3%, while the tech-heavy Nasdaq 100 futures indicated a gain of 26 points, or roughly 0.4%.
Tuesday will be a half-day in the U.S. equity market, with the New York Stock Exchange closing trading for the day at 1:00PM ET.
Elsewhere, European markets were higher, with Germany's DAX posting the best performance with a 1% gain after Chancellor Angela Merkel settled a row over migration in a last-ditch effort to save her government.
4. Dollar Dips As Euro Pushes Higher
Away from equities, the dollar eased marginally against its peers, as risk-sentiment improved after Chinese markets staged a late rally after tumbling overnight.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.2% at 94.40.
In the bond market, the U.S. 10-year Treasury yield ticked up one basis point to 2.88%, the highest in more than a week. Bond markets will also be closing early, with that market settling at 2:00PM ET.
On the data front, U.S. auto sales will be the main economic highlight on Tuesday, which is a half-day for markets ahead of the July 4th holiday. The May report on factory orders is also set for release in the morning.
Meanwhile, the euro pushed higher as political risk in Germany eased. It was last up 0.2% to 1.1665 (EUR/USD).
5. Oil Prices Rally As Supply Worries In Focus
Oil futures were higher, as investors pushed aside higher output concerns and refocused on supply disruptions after Libya declared force majeure on significant amounts of its crude.
Brent crude oil futures were at $77.85 per barrel, up 54 cents, or 0.7%, from their last close, while U.S. West Texas Intermediate crude futures were up 78 cents, or 1%, at $74.72.
The American Petroleum Institute is due to release its weekly report for the week ended June 29 at 4:30PM ET (2030GMT), amid forecasts for an oil-stock drop of around 3.2 million barrels.