The stock market was down on Monday, then it was up, and by the close it was up even more as the Dow, Nasdaq, and S&P 500 all gained at least 1.0%.
The rally effort was attributed primarily to the news that House Speaker Paul Ryan voiced his objections to the tariffs on steel and aluminum proposed by President Trump. Presumably, then, the market got to thinking that the tariffs might not happen.
Notably, the president, who tweeted before the open that the tariffs would only come off if a fair NAFTA agreement is signed, said afterwards that he would not be dissuaded by Mr. Ryan's objections.
The Monday rally train, therefore, left the station, but it remained unclear if the president was on it, which means there is still a risk of derailment. The latter point notwithstanding, the stock market seemingly remains inclined to think that a trade war will be averted.
The S&P futures are up eight points and are trading 0.2% above fair value. The Nasdaq 100 futures are up 33 points and the Dow Jones Industrial Average futures are up 103 points, which leaves them both about 0.4% above fair value.
There is a bullish bias, then, in pre-market trading that will translate into a higher start for the cash market.
It's a momentum trade of sorts. Markets in Asia and Europe have drafted off Monday's relief rally in the U.S.; and a further rise in oil prices ($63.11, +$0.54, +0.9%) is seen as supportive for the energy sector.
At the same time, there are news reports indicating North Korea is pushing the idea of reunification with South Korea and that it could be open to denuclearization talks with the U.S.
The dovish-minded overture from North Korea is being held out this morning as an added basis for the stock market's bullish bias, yet North Korea's diplomatic track record leaves ample room for doubt that it means what it is reportedly saying.
Anyhow, the news is timely for a stock market feeling good about Monday's reversal. It has fed follow-through buying efforts, which are likely rooted in part in the fear-of-missing-out trade.
That fear, however, won't be overplayed until the S&P 500 can push through technical resistance at its 50-day simple moving average (2737-2738) on a closing basis and with heavy volume.
Retailer Target (TGT) should see some heavy trading volume today. The company reported fourth quarter results that were just shy of analysts' increased expectations and issued some conservative-minded first quarter guidance relative to analysts' average expectation.
TGT is down 1.7% in pre-market trading, but it had been down 4.0% earlier.
There isn't any economic data of note before today's open. The Factory Orders report for January (Briefing.com consensus -1.3%; prior +1.7%) will be released at 10:00 a.m. ET, but it shouldn't have any market-moving cachet.