US STOCKS-US stock futures rally after long weekend on Trump's tariff reprieve

By Shashwat Chauhan and Kanchana Chakravarty

May 27 (Reuters) - U.S. stock index futures surged on Tuesday, after President Donald Trump dialed back his threat of steep tariffs against the EU and tensions between the United States and the European bloc cooled, as traders returned after the Memorial Day break.

On Sunday, Trump rolled back his threat to impose 50% tariffs on EU imports next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to arrive at a deal.

He had said on Friday that he was recommending a 50% tariff effective June 1 and expressed frustration that trade negotiations with the EU were not moving quickly enough.

"We think the current US tariff level is not a 'stable equilibrium' and we do not take it for granted that the US and the EU will be able to agree on a benign outcome by July," UBS strategists said in a note.

Asian and European markets were mixed after rising on Monday, although moves in U.S. assets were more pronounced as traders returned after the long weekend.

At 06:42 a.m. ET, Dow E-minis YMcv1 were up 551 points, or 1.32%, S&P 500 E-minis EScv1 rose 88.25 points, or 1.52%, and Nasdaq 100 E-minis NQcv1 gained 342.5 points, or 1.63%.

Most megacap and growth stocks jumped in premarket trading. Apple was up nearly 2%, Alphabet rose 2% and Tesla climbed 2.7%.

Trump Media & Technology Group DJT.O advanced 10.3% after a media report said Trump's social media firm planned to raise about $3 billion to spend on cryptocurrencies such as bitcoin.

Shares of semiconductor industry bellwether Nvidia NVDA.O kicked off the week with a 2.6% rise. The company is slated to report quarterly earnings after markets close on Wednesday.

Long-dated U.S. Treasury yields dipped, with the one on the 30-year note US30YT=RR set for its biggest one-day fall since mid-April, mimicking a steep price rally in longer-term Japanese debt.

In economic data, the May consumer confidence report is due shortly after markets open on Tuesday, while minutes from the U.S. Federal Reserve's last policy meeting are scheduled to be released on Wednesday.

A number of Fed officials are expected to speak through the week. Minneapolis Fed President Neel Kashkari on Tuesday called for holding interest rates steady until there is clarity on how higher tariffs impact inflation.

Personal Consumption Expenditure data - the Fed's favored inflation indicator - for May and a second estimate of first-quarter GDP are also scheduled to be released later this week.

Wall Street witnessed sharp weekly losses on Friday as worries about mounting U.S. debt and Trump's latest trade policy shakeup sparked a broad selloff.

Trump's sweeping tax bill - which is expected to substantially expand federal debt - passed a critical House vote, adding to worries.

The S&P 500 .SPX is about 6% from record highs, although it has rebounded sharply from April lows as easing trade concerns and tame inflation data spurred a risk-on rally.

Temu-parent PDD holdings PDD.O fell more than 12% after missing Wall Street's first-quarter revenue estimates.