Wall Street set to jump on oil gains, easing of lockdowns

(Reuters) – U.S. stock indexes were set to rise at the open on Tuesday as oil prices staged a recovery and a slew of countries eased coronavirus-led restrictions in an attempt to revive their economies.

Some hard-hit countries, including Italy, as well as a handful of U.S. states are tentatively easing stay-at-home orders this week, raising hopes for a recovery in oil demand. Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N) gained about 3% in pre-market trading.

Wall Street’s main indexes snapped their two-day losing streak on Monday as gains in large tech and internet companies and oil prices outweighed concerns about the latest U.S.-China spat and downbeat sentiment from the annual meeting of Warren Buffett’s Berkshire Hathaway.

The S&P 500 .SPX has climbed about 30% from its March lows on the back of unprecedented stimulus measures and signs of a plateau in new COVID-19 cases in many areas.

“There’s a growing sense that the worst for the global economy is right now, while lockdowns are in place and coronavirus treatments are unproven,” said Jasper Lawler, head of research at London Capital Group.

“It follows that it only gets better from here as lockdowns ease and treatments are found.”

However, many market experts have warned the rally could be tested amid a risk of another wave of virus infections and with growing evidence of the damage to the economy and corporate America.

ISM’s survey of the non-manufacturing sector in April is due for release at 10 a.m. ET. The Labor Department’s reading of the monthly nonfarm payrolls data will be out on Friday.

“It’s all about the mood swings and hopes of the economies reopening. But the problem is this could change once we get to see some of the hard numbers, especially the employment report,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

With more than half of the S&P 500 companies reporting so far, first-quarter earnings are expected to have fallen 12.5%, with analysts expecting an earnings recession by the second quarter, according to Refinitiv data.

At 8:49 a.m. ET, Dow e-minis 1YMcv1 were up 303 points, or 1.29%. S&P 500 e-minis EScv1 were up 36.25 points, or 1.28% and Nasdaq 100 e-minis NQcv1 were up 120 points, or 1.36%.

Apple supplier Skyworks Solutions Inc (SWKS.O) gained 2.4% after reporting upbeat quarterly results, but warned of a hit from the pandemic in the current quarter.

L Brands Inc (LB.N) dropped 3.7% after the company called off the sale of its majority stake in Victoria’s Secret lingerie business to buyout firm Sycamore.

Pfizer Inc (PFE.N) rose about 1.8% after it announced that a venture with its German partner had started delivering doses of its experimental coronavirus vaccines for human testing in the United States.

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