Dow Jones & Nasdaq 100 Rise in Asian Session on Trade Deal Optimism

US stock futures started November on a solid footing, with the Nasdaq 100 eyeing an 8-month winning streak. Early disappointment from President Trump’s meeting with Chinese President Xi Jinping gave way to optimism as both sides averted a full-blown trade war, boosting risk sentiment.

Traders must now navigate the potential implications of easing US-China trade tensions and fading bets on a December Fed rate cut. Fed officials have recently reinforced Fed Chair Powell’s caution against further policy easing amid concerns over elevated inflation.

US-China Trade Deal: Details Emerge, Boosting Risk Sentiment

The White House released a fact sheet of the trade agreement between President Trump and President Xi. These include:

• Suspend new rare earth export controls (China).
• Issue general licenses valid for exports of rare earths, gallium, germanium, antimony, and graphite (China).
• Take ‘significant measures’ to end the flow of fentanyl to the US (China).
• Suspend all of the retaliatory tariffs announced since March 4th (China).
• Suspend or remove retaliatory non-tariff countermeasures taken against the US since March 4th (China).
• Purchase at least 12 million metric tons (MMT) of US soybeans in the last two months of 2025 and 25 MMT in 2026, 2027, and 2028 (China).
• Lower tariffs on Chinese imports, imposed to curb fentanyl flows by removing 10 percentage points of the cumulative rate (US).
• Extend the expiration of certain Section 301 tariff exclusions until November 2026 (US).

Why do US stock futures traders need to consider the trade deal?

The Kobeissi Letter highlighted the significance of the latest US-China trade deal for the Nasdaq 100, stating:

“Jensen Huang says the trade deal between Trump and Xi ensures Nvidia (NVDA) can continue to compete in China’s market. Jensen Huang says Nvidia is going to completely transform America’s position in the world’.”

Meanwhile, Chinese economic data signaled a slump in external demand in October.

China Manufacturing PMI Drops Toward 50

While the Trump-Xi trade deal lifted market sentiment, manufacturing PMI data from China signaled uncertainty through the fourth quarter. The RatingDog China General Manufacturing PMI fell from 51.2 in September to 50.6 in October. While holding above the 50 neutral level, weakening external demand and intensifying price pressures could draw Beijing’s attention.

October’s survey came after last week’s trade deal, which may temper the impact of the PMI data on US stock futures.

US Stock Futures: Economic Data and Fed Speakers in Focus

US stock futures advanced on Monday, November 3, extending Friday’s gains. The Nasdaq 100 E-mini led the gains, climbing 102 points. Meanwhile, the S&P 500 E-mini and the Dow Jones E-mini gained 114 points and 22 points, respectively.

Across the Pacific, ISM Manufacturing PMI data could influence sentiment later on Monday. Economists forecast the Manufacturing PMI to rise from 49.1 in September to 49.2 in October. While the headline PMI will influence sentiment, employment and price trends could be key, given increasing concerns about stagflation.

Rising prices and falling employment may fuel speculation about stagflation, potentially weighing on US stock futures. On the other hand, lower prices could boost bets on a December Fed rate cut.

Beyond the data, traders should monitor Fed speeches closely. Fed calls to maintain or cut rates amid mixed inflation and labor market signals may influence US stock futures.

While US stock futures hover near record highs, stagflation remains a downside risk, potentially derailing the fourth-quarter rally.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Following the morning gains, US stock futures remained comfortably above key technical levels, signaling bullish momentum.

The near-term trends will hinge on US Senate votes, economic data, and Fed speakers. Key levels traders should monitor include:

Dow Jones

• Resistance: 48,000, the October 28 record high of 48,214, then 48,250.
• Support: 47,500, 47,000, the 50-day EMA (46,456).

Nasdaq 100

• Resistance: October 30 record high of 26,399, then 26,500.
• Support: 26,000, 25,750, 25,500, the 50-day EMA (24,815).

S&P 500

• Resistance: October 30 record high of 6,954, then 7,000.
• Support: 6,750, the 50-day EMA (6,684), and 6,500.

Market Outlook: Stagflation Risks Linger

Traders could face a choppy US session, with manufacturing sector data, Fed speakers, and a Senate vote in the spotlight.

Rising stagflation risks, stemming from a sharper US manufacturing sector contraction and rising prices, could weigh on sentiment. Notably, a failed Senate vote on passing a stopgap funding bill could exacerbate concerns about the economic outlook.

Given these dynamics, traders should closely monitor Fed speakers in the absence of crucial US labor market data.

Follow our live coverage and consult the economic calendar for real-time market updates.