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U.S. Stocks May Extend Rally On Optimism About Trade Talks

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Stocks are likely to move to the upside in early trading on Friday, extending the rally seen over the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 266 points.

Growing optimism about ongoing U.S.-China trade talks is likely to contribute to continued strength on Wall Street as the high-level negotiations move into their second day.

President Donald Trump told reporters shortly after the close of trading on Thursday that the talks with China are going "really well."

"So, we just completed a negotiation with China. We're doing very well. We're having another one tomorrow. I'm meeting with the Vice Premier over at the White House," Trump said. "And I think it's going really well, I will say. I think it's going really well."

While Trump is almost always upbeat about talks with China, his remarks were backed up by a White House official, who told Reuters the talks had gone very well, "probably better than expected."

A U.S. Chamber of Commerce official briefed on the talks also told reporters the two sides could at least reach a partial deal that includes the U.S. calling off a planned increase in tariffs on Chinese goods.

Traders are likely to remain focused on any reports of progress in the talks or a lack thereof, potentially leading to some volatility on Wall Street.

The highly anticipated trade talks have largely overshadowed a report from the Labor Department showing an unexpected increase in import prices but also an unexpected decrease in export prices.

The Labor Department said import prices rose by 0.2 percent in September after dipping by a revised 0.2 percent in August.

Economists had expected import prices to come in unchanged compared to the 0.5 percent drop originally reported for the previous month.

Meanwhile, the report said export prices edged down by 0.2 percent in September after sliding by 0.6 percent in August. Export prices had also been expected to come in unchanged.

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of October. The consumer sentiment index is expected to pull back to 92.0 in October after rebounding to 93.2 in September.

Following the strong upward move seen on Wednesday, stocks saw some further upside during trading on Thursday. With the gains, the major averages further offset the sharp pullback that was seen earlier in the week.

The major averages pulled back off their best levels of the day but remained firmly positive. The Dow climbed 150.66 points or 0.6 percent to 26,496.67, the Nasdaq advanced 47.04 points or 0.6 percent to 7,950.78 and the S&P 500 rose 18.73 points or 0.6 percent to 2,938.13.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.2 percent, while Hong Kong's Hang Seng Index soared by 2.3 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has spiked by 2 percent, the French CAC 40 Index is up by 1.1 percent and the U.K.'s FTSE 100 Index is up by 0.8 percent.

In commodities trading, crude oil futures are climbing $0.77 to $54.32 a barrel after jumping $0.96 to $53.55 a barrel on Thursday. Meanwhile, after slumping $11.90 to $1,500.90 an ounce in the previous session, gold futures are sliding $12 to $1,488.90 an ounce.

On the currency front, the U.S. dollar is trading at 108.34 yen versus the 107.98 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1044 compared to yesterday's $1.1005.

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