US STOCKS-Wall St set for record open on US-China trade hopes; tech results, Fed on deck

By Pranav Kashyap and Twesha Dikshit

Oct 27 (Reuters) - Wall Street's main indexes were poised to open at record highs on Monday, as expectations of a U.S.-China trade truce fueled risk-taking in a week packed with Big Tech earnings and a likely Federal Reserve rate cut.

President Donald Trump and China's Xi Jinping are set to meet on Thursday, after negotiators from the world's top two economies on Sunday outlined the framework for a deal to pause steeper American tariffs and Chinese rare earths export controls.

U.S. rare earth miners fell: MP Materials MP.N, USA Rare Earth USAR.O and NYSE-listed shares of Trilogy Metals TMQ.N were down 4.4%, 6.1% and 5%, respectively.

At 08:19 a.m. ET, Dow E-minis YMcv1 were up 220 points, or 0.46%, Nasdaq 100 E-minis NQcv1 were up 329.25 points, or 1.29%, and S&P 500 E-minis EScv1 were up 56 points, or 0.82%.

Wall Street's fear gauge, the VIX .VIX, hit a one-month low. The volatility index had earlier this month touched its highest level since April - when Trump rolled out his "Liberation Day" tariffs.

U.S.-listed shares of Chinese companies gained in premarket trading. Alibaba Group Holding BABA.N and JD.com JD.O were up around 3% each. PDD Holdings PDD.O rose 2% and Baidu BIDU.O added 5.1%.

Last week, the S&P 500 .SPX and Nasdaq .IXIC notched their biggest weekly gains since August thanks to cooler-than-expected inflation data that solidified expectations of a 25-basis-point rate cut from the central bank on Wednesday.

Any forward‑looking comments from Fed Chair Jerome Powell will be monitored for hints on another cut in December, especially with the ongoing government shutdown disrupting key economic data releases.

"The lack of official inflation data will be supportive of the rally in the near term because monetary policy could be operating with an increasingly blind spot heading into the new year," said Jordan Rizzuto, CIO at GammaRoad Capital Partners.

BLOCKBUSTER EARNINGS

As the busiest week of this earnings season kicks off, more than 170 companies are expected to report and all eyes will be on Big Tech.

Earnings from "Magnificent Seven" heavyweights Microsoft MSFT.O, Apple AAPL.O, Alphabet GOOGL.O, Amazon AMZN.O, and Meta META.O will act as a litmus test for Wall Street's lofty valuations, the staying power of the rally and the long-term viability of outsized bets on artificial intelligence.

The seven megacaps together make up nearly 35% of the S&P 500 benchmark, which is now expected to see third-quarter earnings growth of 10.4% year-on-year, higher than an earlier estimate of 8.8%, according to LSEG data.

"If the economy softens enough, it could alleviate concerns about inflationary pressures, but it could introduce pressure on earnings growth, which needs to catch up with valuation expansion to sustain this rally going into 2026," Rizzuto said.

In premarket trading, U.S.-listed shares Of Argentine companies jumped after President Javier Milei's election victory.

YPF YPF.N surged 31%, while Grupo Supervielle SUPV.N gained 38%. Banco Macro BMA.N and Banco BBVA Argentina BBAR.N rose 40% each and Grupo Financiero Galicia GGAL.O advanced 39%.

Keurig Dr Pepper KDP.O jumped 8% after raising its annual sales forecast.

MP Materials MP.N fell 4.4%, with USA Rare Earth USAR.O and NYSE-listed shares of Trilogy Metals TMQ.N down 6.1% and 5%, respectively.