S&P, Dow set for higher open on trade optimism

By Shreyashi Sanyal

(Reuters) - U.S. stock index futures were higher on Friday on hopes the United States and China would begin efforts to resolve their trade dispute, but gains were capped by a strong monthly jobs data that raised concerns of faster interest rate hikes.

The Labor Department report showed U.S. job growth rebounded sharply in October and wages recorded their largest annual gain in nine-and-half years, pointing to further tightening of labor market that could encourage the U.S. Federal Reserve to raise interest rates again in December.

"The trend is still higher and it's still consistent with the Fed raising short-term interest rates, but perhaps a little bit more than the markets had expected before the report," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"This definitely raises expectations for a hike in December."

The prospect of higher borrowing rates was one of the factors, along with tariffs and slowing global growth, that triggered a tumble in the stock markets last month.

The markets got a boost on Friday after President Donald Trump and his Chinese counterpart Xi Jinping expressed optimism about resolving the trade dispute ahead of a high-stakes meeting at the end of November in Argentina.

Shares of trade-sensitive industrial bellwethers, Caterpillar Inc, Boeing Co and 3M Co, rose between 1.2 percent and 2 percent.

Futures were also under pressure as Apple's shares dropped 6.5 percent in premarket trading, taking its market value below $1 trillion, after the company warned that sales for the crucial holiday quarter would likely miss expectations.

That weighed on the tech-heavy Nasdaq, but the S&P and the Dow were set to rise for the fourth day in a row.

At 9:03 a.m. ET, Dow e-minis were up 221 points, or 0.87 percent. S&P 500 e-minis were up 16.25 points, or 0.59 percent and Nasdaq 100 e-minis were down 16.75 points, or 0.24 percent.

Starbucks Corp climbed 7.4 percent after the coffee chain reported same-store sales that beat estimates, benefiting from higher prices in the United States and a rebound in China.

Symantec Corp jumped 8 percent, after the cybersecurity firm topped profit and revenue estimates as revenue from its consumer security division rose.

Kraft Heinz Co dropped 5.7 percent after the company missed quarterly earnings estimates on steep commodity costs.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)