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Futures: Dow up 0.12%, S&P up 0.01%, Nasdaq down 0.27%

June 5 (Reuters) – Wall Street futures were subdued on Monday after a solid rally last week, as investors weighed the possibility of a pause in interest rate hikes by the Federal Reserve at its upcoming policy meeting.

U.S. stocks rallied on Friday after a labor market report showing moderating wage growth in May indicated the U.S. central bank may skip a rate hike next week, while investors welcomed a Washington deal that avoided a catastrophic debt default.

The benchmark S&P 500 .SPX closed at a fresh nine-month high on Friday and the tech-heavy Nasdaq .IXIC scaled a new one-year peak, underpinned by gains in megacap technology stocks that have outperformed the broader market this year.

Traders are pricing in a 78.2% chance that the Fed will hold interest rates at the conclusion of its June 13-14 policy meeting, according to CME Group’s Fedwatch tool, though they expect another hike in July.

Surveys from S&P Global and Institute for Supply Management on U.S. services sector activity in May are due after the opening bell, while Fed Cleveland President Loretta Mester is slated to speak at an event later in the day.

At 5:55 a.m. ET, Dow e-minis 1YMcv1 were up 40 points, or 0.12%, S&P 500 e-minis EScv1 were up 0.25 points, or 0.01%, and Nasdaq 100 e-minis NQcv1 were down 39.25 points, or 0.27%.

Energy stocks including Exxon Mobil Corp XOM.N, Chevron Corp CVX.N and Schlumberger Ltd SLB.N rose about 1% each in premarket trading, as oil prices LCOc1, CLc1 jumped more than 2% after top global exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July. O/R

Palo Alto Networks Inc PANW.O climbed 5.3% as the cybersecurity firm looks set to replace Dish Network DISH.O in the S&P 500 index. Dish shares tumbled 7.8%.

Big U.S. banks were mixed after the Wall Street Journal reported that U.S. regulators were preparing to tighten rules for large banks, which could include raising their capital requirements by 20% on average. Bank of America Corp BAC.N climbed 0.2%, while Citigroup Inc C.N slipped 0.2%.

Apple Inc AAPL.O edged up 0.6% ahead of its annual software developer conference, where it is widely expected to announce a new mixed-reality headset.

(Reporting by Sruthi Shankar in Bengaluru Editing by Vinay Dwivedi)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))

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