Ahead of a key vote on a debt deal hammered out by Democrats and Republicans, stocks looked set for a relief rally on Monday as a U.S. default looked less likely.
U.S. stock index futures were up sharply with about 90 minutes before markets open, suggesting that stocks will rise at the start of trading.
Futures for the Dow Jones industrial average were up 155 points or 1.3 per cent. Futures for the broader S&P 500 were up nearly 16 points or 1.2 per cent. Both indexes slumped for five straight days last week as investors grew concerned that an impasse in Washington in negotiations to raise the country's debt ceiling before an August 2 deadline would lead to a short-term default on financial obligations and a potential downgrade by debt rating agencies.
There was relief overseas as well. In Japan, the Nikkei 225 rose 1.3 per cent in overnight trading. In Europe, the FTSE 100 was up 1.3 per cent in afternoon trading while German's DAX index was up 0.5 per cent.
Canadian markets are closed on Monday, but commodity markets were on the move. Crude oil rose more than a dollar in New York, closing in on $98 (U.S.) a barrel. However, gold fell about $9 or 0.6 per cent.