By Sara Sjolin, MarketWatch

U.S. manufacturing PMI and ISM data are also in focus

U.S. stocks were poised to rebound Tuesday, with futures pointing higher after strong Chinese manufacturing data instilled more confidence in global growth and sent global stock markets higher.

Investors were waiting for the latest on U.S. manufacturing, with purchasing managers' index and ISM data due early in the day.

Futures for the Dow Jones Industrial Average rose 28 points, or 0.2%, to 18,090, while those for the S&P 500 index added 4.40 points, or 0.2%, to 2,124.25. Futures for the Nasdaq 100 index gained 7.75 points, or 0.2%, to 4,804.50.

The gains came after all three benchmarks ended lower on Monday, as a drop in oil prices and uncertainty ahead of the U.S. presidential election next week weighed on investors' minds.

On Tuesday, oil prices were in recovery mode, helping give sentiment about equities a slight boost. Crude oil was up 0.1% at $46.88 a barrel, while Brent added 0.4% to $48.81.

Stock markets were also buoyed by upbeat data from China, where the official manufacturing PMI for October rose to a two-year high (http://www.marketwatch.com/story/china-manufacturing-pmi-at-highest-since-july-2014-2016-11-01) of 51.2, from September's 50.4.

"Chinese PMI data for October surprised strongly on the upside, adding to the picture of a global recovery and putting more fuel on the reflation theme," analysts at Danske Bank said in a note.

"The data are positive for risk assets, as they underpin the picture of a global cyclical rebound," they added.

Stocks, which are considered risk assets, closed mostly higher inAsia, with Hong Kong's Hang Seng rising 0.9%. European stocks opened higher, but turned lower midmorning as disappointing earnings reports came in. Prices of metals, which are sensitive to growth news out of China, rose across the board.

Economic news: Manufacturing activity was also a focus in the U.S., where the Markit PMI and the ISM index are due to come out at 9:45 a.m. Eastern Time and 10 a.m. Eastern, respectively.

Economists polled by MarketWatch expect the ISM to inch up to 51.7% from 51.5% in September.

"In theory, weak growth in the ISM index might be negative for the dollar," said Marshall Gittler, head of investment research at FXPrimus, in a note.

"However, the closely watched ISM prices paid index is forecast to rise as well. That's seen as a harbinger of inflation trends. If that turns up, then even if the economy slows, the [Federal Reserve] can still go ahead and tighten policy. That would make it positive for thedollar," he added.

The ICE dollar index was down 0.2% at 98.208 premarket on Tuesday.

The Fed will announce its latest rate decision on Wednesday, but is widely expected to keep interest rates on hold. For the December meeting, however, analysts are forecasting a rate hike.

Movers and shakers: U.S.-listed shares of Royal Dutch Shell PLC(RDSB.LN) (RDSB.LN) rose 4% ahead of the open after the oil giant reported a rise in third-quarter profit (http://www.marketwatch.com/story/shell-swings-to-profit-but-cautious-in-oil-view-2016-11-01).

Shares of Brocade Communications Systems Inc.(BRCD) could also be active, after they soared more than 20% on Monday on reports it is in advanced talks to sell (http://www.marketwatch.com/story/brocade-stock-soars-on-report-of-sale-talks-2016-10-31) itself.

(END) Dow Jones Newswires

November 01, 2016 06:24 ET (10:24 GMT)

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