US STOCKS-Wall Street set for higher open as investors focus on trade, key jobs data

By Kanchana Chakravarty and Sukriti Gupta

June 5 (Reuters) - Wall Street's main indexes were set for a higher open on Thursday as investors looked ahead to the monthly jobs report to gauge the impact of President Donald Trump's trade policies on the labor market and the Federal Reserve's interest rate trajectory.

Futures turned positive after Chinese President Xi Jinping on Thursday held talks with Trump by phone, the official Xinhua news agency reported.

Following Wednesday's weaker-than-expected U.S. private jobs and services sector data, Friday's non-farm payrolls report will come under sharp scrutiny as investors fear that Trump's erratic trade policies will drive a slowdown in economic growth.

The data comes ahead of the Fed's policy decision later this month, where policymakers are widely expected to hold interest rates. Traders currently see at least two rate cuts by the end of this year, as per pricing in money markets.

Despite continued calls from Trump to slash interest rates, Fed Chair Jerome Powell has opted to stand pat so far, awaiting further data to help dictate the policy decision as tariff volatility prevails.

Initial jobless claims data on Thursday showed Americans filing new applications for unemployment benefits last week rose for a second straight week.

"I don't think it's some sort of big warning sign right now, but it speaks to the fact that the labor market has been softening more and just getting gradually weaker," said Kevin Gordon, senior investment strategist at Charles Schwab.

On Wednesday, Washington's doubled tariffs on imported steel and aluminum came to effect and it also marked Trump's deadline for trading partners to make their best offers to avoid other punishing import levies from taking effect in early July.

U.S. equities rallied sharply in May, with investors boosting the S&P 500 index .SPX and the tech-heavy Nasdaq .IXIC to their biggest monthly percentage gain since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.

The S&P 500 remains nearly 3% below record highs touched in February.

U.S. central bank officials including Fed Board Governor Adriana Kugler, Fed Kansas City President Jeffrey Schmid and Fed Philadelphia President Patrick Harker are scheduled to speak later in the day.

At 8:57 a.m. ET, Dow E-minis YMcv1 were up 110 points, or 0.26%, S&P 500 E-minis EScv1 were higher 17 points, or 0.28%. Nasdaq 100 E-minis NQcv1 rose 59.75 points, or 0.27%.

Most megacap and growth stocks were mixed in premarket trading. Tesla TSLA.O fell 2.9%.

Shares of MongoDB MDB.O jumped 18.7% after the software company gave an upbeat annual forecast and reported quarterly results above estimates.

Chewy CHWY.N fell 3% after Jefferies downgraded the online pet products retailer to "hold" from "buy".