Wall Street set to open higher as global stocks rally after days of pain

• European and Asian stocks and US futures rose on Tuesday after a painful sell-off.
• Japan may get priority in tariff negotiations, Treasury Secretary Scott Bessent said.
• Analysts are warning of potential market volatility and long-term impacts on US company valuations.

European and Asian stocks are up and Wall Street is set to open higher after days of bloodshed triggered by President Donald Trump's tariff shock.

The gains come on the back of news that countries are now lining up to negotiate tariffs with the Trump administration.

Treasury Secretary Scott Bessent told Fox Business on Monday that Japan is likely to get priority for a deal as they came forward "very quickly."

Most of the US tech heavyweights known as the "Magnificent Seven" advanced in premarket trading on Tuesday. As of 6:30 a.m. ET, Nvidia, Tesla, Apple, Amazon, and Alphabet were all up more than 1%.

In Europe, Dutch payments group Adyen gained 5.2%, French aerospace company Safran rose 3.5%, and microchip supplier ASML's climbed 3.3%. Automakers remained broadly in the red with BMW and Stellantis down more than 1.5%, and Volkswagen and Mercedes-Benz down about 0.5%.

Hong Kong and China shares rose after news of state-linked purchases. Central Huijin Investment, a state-owned investment firm, said it has increased its holdings of exchange-traded funds, Xinhua state news agency reported on Tuesday.

Indonesian stocks slumped nearly 10% on the first trading day after weeklong public holidays. Taiwanese shares remain weak.

US stocks climbed in premarket trading after a painful three days:

• S&P 500: up 1.3% at 5,164 points
• Dow Jones Industrial Average: up 1.8% at 38,847 points
• Nasdaq 100: up 1% at 17,734 points

European stocks regained ground:

• Germany's DAX: up 1.1%
• Britain's FTSE 100: up 1.6%
• France's CAC 40: up 0.9%
• Euro Stoxx 50: up 0.9%

Asia's major indexes closed mostly higher:

• Japan's Nikkei 225: up 6%
• South Korea's Kospi: up 0.3%
• Hong Kong's Hang Seng Index: up 1.5%
• China's CSI 300: up 1.7%
• Australia's ASX 200: up 2.3%
• Taiwan's Taiex: down 4%

Analysts remained wary following trillions of dollars in stock market losses since Trump announced sweeping tariffs against the world last Wednesday.

Yeap Jun Rong, an IG market strategist, wrote in a note on Tuesday that markets have sold down so much over the last few days that there could be a massive swing in sentiment on even "the slightest positive news" about the tariffs.

"For now, some calm has descended with the VIX pulling back from its recent high, as countries head into the 'negotiating phase' for tariffs," he wrote, referring to the CBOE Volatility Index.

Volatility reigned in the US markets on Monday, with the S&P 500 officially entering bear market territory only to spike 8.5% momentarily due to inaccurate news that Trump was considering a 90-day pause for the tariffs. The index ended the day 0.2% lower.

"Despite this morning's recovery, markets are hardly in a good place right now, with an incredible amount of volatility still happening across different asset classes," Deutsche Bank analysts wrote in a Tuesday note.

Among the risks is a further escalation between the US and China, which have slapped retaliatory tariffs on each other recently and issued fresh tariff threats, indicating neither side is backing down.

Some analysts say investors should consider the long-term upheaval Trump's tariffs could bring to company profits and valuation, particularly in the US.

"Decades of outsized market gains and high household exposure to equities mean negative wealth effects will be stronger in America, as is the potential for valuation downgrades and foreign fund repatriation," wrote analysts at Global Data.TS Lombard in a Monday note.