Investing.com - Here are the top five things you need to know in financial markets on Monday, June 4:
1. Dow Futures Rise 150 Points
U.S. stock markets looked set to start the week on a firmly positive note, with investors using last week's robust U.S. jobs report to drive markets higher.
At 5:40AM ET, the blue-chip Dow futures were up 150 points, or about 0.6%, while the S&P 500 futures tacked on 12 points, or nearly 0.4%.
The tech-heavy Nasdaq 100 futures indicated a gain of 35 points, or roughly 0.5%, which would put the benchmark on track to test its January record high of 7,588 points.
Wall Street stocks rose on Friday after the latest monthly jobs report pointed to strength in the U.S. economy, with technology stocks leading the rally.
There is no major economic data on today's calendar, with only a report on factory orders due at 10:00AM ET (1400GMT).
The earnings calendar will be fairly quiet with no major companies set to report results, though investors will get quarterly updates from Dell Technologies (NYSE:DVMT), Palo Alto Networks (NYSE:PANW) and Coupa Software (NASDAQ:COUP).
2. China Warns The U.S. On Tariffs
China warned the United States on Sunday that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing.
The world's two largest economies have threatened each other with tens of billions of dollars' worth of tariffs in recent months, leading to worries that Washington and Beijing may engage in a full-scale trade war that could damage global growth and roil markets.
With a lack of major economic reports and earnings news, markets could focus more heavily on trade-related headlines in the coming week as President Donald Trump prepares to meet world leaders at the G7 summit in Canada.
3. Dollar Pushes Lower As U.S-China Trade Tensions Weigh
The dollar started the week lower, after weekend talks between the U.S. and China on trade ended without a breakthrough, raising the danger that negotiations could collapse.
The dollar index was off almost 0.4% to 93.76.
There are no Federal Reserve speakers in the coming week since it is the quiet period ahead of the June 12-13 Federal Open Market Committee meeting, when the Fed is widely expected to raise interest rates.
The U.S. central bank is increasingly likely to raise rates a fourth time this year after last week's employment report showed U.S. job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8%.
The U.S. Labor Department's report also showed solid wage gains, pointing to rapidly tightening labor market conditions, which could stir concerns about inflation.
4. Oil Prices Stay Under Pressure
Oil prices got the week off to a lackluster start, as rising U.S. crude production and expectations that OPEC members will raise supplies remained in focus.
U.S. West Texas Intermediate WTI crude was down 12 cents, or 0.2%, at $65.69 a barrel, sitting around its lowest since April 11.
Brent crude futures were down 35 cents, or around 0.5%, at $76.43 a barrel.
Prices have struggled in recent sessions on concerns that the Organization of the Petroleum Exporting Countries and non-OPEC members led by Russia would pump more crude, even as U.S. oil output rises.
Meanwhile, Brent's premium over WTI futures remained near three-year highs above $10 a barrel. The premium has doubled in less than a month, as a lack of pipeline capacity in the United States has trapped a lot of output inland.
5. European Markets, Euro Boosted By Easing Political Risks
European financial markets extended their recovery rally, boosted by signs of easing political risks in Italy and Spain.
The pan-European Stoxx 600 was up around 0.5% during mid-morning trade, with all sectors and major bourses in positive territory.
Among national indexes, Italian and Spanish equities were the top gainers, having suffered a week of heightened uncertainty as Italian parties negotiated a government and Spain's Prime Minister was ousted.
Meanwhile, the euro tacked on 0.6% against the dollar to 1.1731 (EUR/USD), well clear of last week's 10-month low of 1.1506.
In a further sign of the calmness that has returned to the market, the spread on Italian and Spanish bond yields over benchmark German Bunds narrowed sharply.