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U.S. Stocks May Follow Overseas Markets Higher In Early Trading

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With traders returning to their desks following the holiday weekend, stocks are likely to extend a recent upward trend in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 398 points.

Strength in overseas markets may carry over to Wall Street, as Chinese shares skyrocketed on the day amid positive commentary on the market from state media.

China's Securities Times said fostering a "healthy" bull market after the coronavirus pandemic is now more important to the economy than ever.

Traders also remain generally optimistic about the U.S. economic outlook following last Thursday's better than expected jobs data.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of June.

The non-manufacturing index is expected to climb to 50.0 in June from 45.4 in May, with a reading of 50 marking the dividing line between expansion and contraction.

Overall trading activity may be somewhat subdued, however, as some traders may remain away from their desks following the long weekend.

Lingering concerns about the recent spike in coronavirus cases may also keep some traders on the sidelines, with the World Health Organization reporting the biggest single-day increase in cases on Saturday.

After failing to sustain an early rally, stocks gave back some ground over the course of the trading session on Thursday. The major averages pulled back well off their best levels of the day but still managed to close in positive territory, with the Nasdaq reaching a new record closing high.

The major averages came under pressure going into the close but held on to moderate gains. The Dow rose 92.39 points or 0.4 percent to 25,827.36, the Nasdaq advanced 53.00 points or 0.5 percent to 10,207.63 and the S&P 500 climbed 14.15 points or 0.5 percent to 3,130.01.

For the holiday shortened week, the Dow surged up by 3.2 percent, the S&P 500 spiked by 4 percent and the tech-heavy Nasdaq soared by 4.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index surged up by 1.8 percent, while China's Shanghai Composite Index spiked by 5.7 percent.

The major European markets have also shown strong moves to the upside on the day. While the German DAX Index has jumped by 1.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both up by 1.8 percent.

In commodities trading, crude oil futures are inching up $0.11 to $40.76 a barrel after advancing $0.83 to $40.65 a barrel last Thursday. Meanwhile, after climbing $10.10 to $1,790 an ounce in the previous session, gold futures are rising $6.40 to $1,796.40 an ounce.

On the currency front, the U.S. dollar is trading at 107.46 yen versus the 107.51 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1325 compared to last Thursday's $1.1248.

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