US STOCKS-Wall Street futures subdued ahead of US-China trade talks

By Kanchana Chakravarty and Sukriti Gupta

June 9 (Reuters) - U.S. stock index futures were subdued on Monday as investors looked ahead to talks between the United States and China aimed at mending a trade rift that has rattled financial markets for much of the year.

Top officials from both countries will meet in London to address disagreements around a preliminary agreement struck last month in Geneva that had briefly cooled tensions between the world's largest economies.

The meetings come four days after U.S. President Donald Trump and Chinese leader Xi Jinping spoke by phone, their first direct interaction since Trump's January 20 inauguration. The leaders had, however, left key issues unresolved for future talks.

"There is reasonable optimism that the second round of talks this week will lead to a further thaw in trade relations between Washington and Beijing," said Raffi Boyadjian, lead market analyst at brokerage XM, in a note.

The benchmark S&P 500 .SPX closed above 6,000 on Friday for the first time since Feb. 21, following a better-than-expected jobs report and a rebound in Tesla's TSLA.O shares.

Hopes of more trade deals between the U.S. and its major trading partners, along with upbeat earnings and tame inflation data, helped U.S. equities rally in May, with the S&P 500 and the tech-heavy Nasdaq .IXIC notching their best monthly gains since November 2023.

The S&P 500 remains a little over 2% below all-time highs touched in February, while the Nasdaq is about 3% below its record peaks reached in December.

Citigroup joined major brokerages in raising its year-end target for the S&P 500, citing renewed optimism in corporate earnings resilience and the accelerating momentum of artificial intelligence-driven growth. It sees the benchmark ending the year at 6,300, compare with 5,800 forecast previously.

Major data releases this week include readings on May consumer prices and initial jobless claims. While investors widely expect the Federal Reserve to keep interest rates unchanged next week, focus will be on any signs of pick-up in inflation as Trump's tariffs risk raising price pressures.

Traders currently expect 46 basis points of rate cuts by the end of 2025 and are pricing in a 55% chance of a 25 bps cut in September, according to data compiled by LSEG.

At 07:00 a.m. ET, Dow E-minis YMcv1 were up 17 points, or 0.04%, S&P 500 E-minis EScv1 were up 3.25 points, or 0.05%, and Nasdaq 100 E-minis NQcv1 were down 8.25 points, or 0.04%.

Most megacap and growth stocks were mixed in premarket trading. Tesla TSLA.O shares fell 2.7% after a report said Baird downgraded the stock to "neutral" from "outperform".

Robinhood Markets HOOD.O fell 5.3% after the S&P 500 kept index constituents unchanged in its latest rebalancing, contrary to some analysts who had expected the online brokerage to join the benchmark index.

Intuitive Surgical ISRG.O fell 3.2% after Deutsche Bank downgraded the medical device maker to "sell" from "hold".

EchoStar SATS.O shares dropped 6.4% after a report said the telecommunications services firm was considering a Chapter 11 bankruptcy filing.

Shares of Sunnova Energy NOVA.N slumped 31% after the company filed for Chapter 11 bankruptcy protection.