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US stock futures briefly up 300 points, point to Wall Street bounce

U.S. equity markets, which reopen on Tuesday after a long weekend, are tipped to open higher amid gains in European and Asian stock markets.

Stock market futures market futures were broadly higher, with Dow Jones industrial average futures trading about 260 points higher after earlier rising more than 300 points—pointing to a rebound for U.S. stocks which tumbled on Friday amid jitters about a possible Federal Reserve rate hike later this month.

U.S. markets were closed on Monday for the Labor Day holiday.

Trader on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Trader on the floor of the New York Stock Exchange.

Further signs of weakness in China's economy could dent sentiment on Wall Street. Data released earlier on Tuesday showed that China's dollar-denominated exports declined by 5.5 percent year-on-year in August, while imports tumbled 13.8 percent.

In Asia, Japan's blue-chip Nikkei stock index closed down 2.4 percent and move into negative territory for the year so far as the weak trade numbers fueled concerns about demand for Japanese exports from China.

Still, China's Shanghai Composite closed almost 3 percent higher brushing aside the soft data following reports that railway projects worth almost $11 billion have been approved.

Volatility in Chinese stock markets in recent months has been a key theme for global markets as investors assess the scale of a slowdown in the world's second-largest economy.

"Chinese trade data added to the doom and gloom surrounding the world's second largest economy over night," Craig Erlam, a senior market analyst at currency trading firm OANDA, said in a note.

"While the overall trade surplus was just shy of its record, the underlying figures were very disappointing and pointed to slowing demand, both domestically and from abroad," he said.

Data is thin in terms of U.S. economic releases, with July consumer credit numbers due out at 15:00 ET.

Focus is expected to remain on the outlook for a U.S. interest rate rise after Friday's key jobs data was seen by many analysts as strong enough to trigger a move from the Fed which meets next week.

A rally in European shares may also lend some support at the Wall Street open. Benchmark stock indices in the U.K., France and Germany were all more than 1.5 percent higher midway through the trading session.

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U.S. stocks closed more than 1 percent lower on Friday, weighed down by uncertainty about the timing of a U.S. rate hike and China growth concerns.