By Peter Nurse
Investing.com - U.S. stocks are set to open higher Monday amid hopes of more stimulus ahead and as states continue to reopen their economy, all of which is outweighing increased trade tension with China.
At 06:55 AM ET (1055 GMT), S&P 500 futures traded 43 points, or 1.5%, higher, Nasdaq futures were up 119 points, or 1.3%. The Dow futures contract rose 373 points, or 1.6%.
Federal Reserve Chairman Jerome Powell warned over the weekend that the U.S. economy could "easily" contract by 20%-30% amid the pandemic, and that the economic downturn might last until late 2021.
However, he also told CBS’s 60 Minutes program that “we’re not out of ammunition by a long shot” as he said the Fed could enlarge existing lending programs or start new ones. Powell is due to appear before the Senate Banking Committee on Tuesday.
On Friday, Democrats in the House of Representatives passed an additional $3 trillion coronavirus relief package. However, it is not expected to pass the Republican-majority Senate.
This comes as more and more states start to reopen their economies. The Trump administration offered up reopening guidelines just over a month ago, and since then more than 30 states have partially reopened.
This positive news has tended to overshadow the latest salvo in war of words between China and the U.S. over the coronavirus outbreak. White House trade advisor Peter Navarro had accused China of knowingly spreading the virus around the world while concealing its full knowledge of the outbreak.
This week will see first-quarter earnings results from big U.S. retailers including Walmart (NYSE:WMT), Home Depot (NYSE:HD), Lowe's (NYSE:LOW), Target (NYSE:TGT), Kohl's (NYSE:KSS) and Best Buy (NYSE:BBY). Their figures will show whether U.S. consumers are still spending money despite the widespread coronavirus lockdowns.
Ahead of this, Goldman Sachs (NYSE:GS) will be in the spotlight after news emerged that Warren Buffett's Berkshire Hathaway (NYSE:BRKa) sold off 84% of its stake in the investment banking giant during the first quarter, according to a regulatory filing.
Apple (NASDAQ:AAPL) will also be in focus after it released guidelines late Sunday for how it will reopen its retail stores once it is safe to do so. It plans to reopen 25 stores in the U.S. this week.
Oil futures continued to push higher Monday, hitting a two-month high ahead of Tuesday’s monthly expiration of the U.S. West Texas Intermediate contract. A repeat of last month’s turmoil looks unlikely at this point.
At 6:55 AM ET, U.S. crude June futures traded 7.8% higher at $31.31 a barrel. The international benchmark Brent contract rose 6% to $34.45.
Elsewhere, gold futures rose 0.9% to $1,771.30/oz, while EUR/USD traded at 1.0814, largely flat.