U.S. stocks were set to rise at the open on Tuesday after strong Chinese trade data eased concerns of a slowdown in the world's second-largest economy and pointed to strong global demand.
China posted an $11.4 billion trade surplus in April, nearly four times greater than expected, after exports hit a record on healthy demand and imports rose less than forecast.
The Chinese trade data would indicate to me that other large and developing economies are strengthening, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. The world economy is still strengthening.
Still, he said a possible dollar rally sparked by deepening euro zone debt troubles could hurt commodities and force a shift in sector leadership in U.S. stocks.
The news out of Europe in the next two weeks has the potential to be a catalyst and create a sharp move one way or another, said Tom Alexander, head of Alexander Trading in Savannah, Georgia.
He said it was remarkable how little the market declined last week when compared to the severe correction in commodities.
He added that the lows set last week were key technical support. If last week's lows are taken that would be a short-term concern, he said.
Despite last week's losses, the S&P 500 held above important technical levels, with the week's low just below 1,330 and Friday's close above 1,340. Both levels have recently attracted buyers after having provided strong resistance. The S&P closed at 1,346.29 on Monday.
S&P 500 futures rose 4.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 58 points, and Nasdaq 100 futures added 11.5 points.
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Futures had a muted reaction to a government report that showed U.S. import prices rose at a slower pace in April, supporting views the recent jump in commodity prices was likely to be transitory.
The Commerce Department releases wholesale inventories for March at 10 a.m. EDT. Economists look for inventories to rise 1.0 percent, a repeat of the February increase.
U.S. stocks advanced on Monday as commodity-related shares rebounded from last week's collapse, masking deeper doubts about what will sustain the market's long-term strength.
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)