US open: Markets start higher as nonfarms reading lingers

US stocks opened at some of their best levels of the year on Monday, as the markets kicked off the new earnings season and investors continued to react to a surprisingly strong non-farm payrolls report last week.

The Dow Jones Industrial Average rose 0.34% to 18,208.51, while the S&P 500 index increased 0.33% to 2,137.02 and the Nasdaq 100 climbed 0.48% to 4,549.94.

“Equity markets continue to ride north helped by a US jobs report seen to quell fears about a US economic downturn and jobs market weakness, without fuelling fears about a Fed rate hike waiting in the wings,” said Accendo Markets head of research Mike van Dulken.

US equities advanced on Friday after the nonfarm payrolls showed employers added 287,000 jobs in June, smashing forecasts for a 170,000 gain.

Many analysts said, however, that the strong jobs report is unlikely to persuade the Federal Reserve to raise interest rates any time soon in the wake of the UK’s Brexit vote and low inflation.

Fed officials may offer clues on the direction of central bank policy on Monday with Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester due to speak later.

Elsewhere, Asian markets rallied after Japan Prime Minister Shinzo Abe declared victory in Sunday’s election, saying he would push ahead with Abenomics – his economic reform programme.

The news fuelled speculation that Abe would introduce further stimulus measures to revive the flagging Japanese economy.

Oil prices were rising in early US trading, with Brent crude last up 0.49% at $46.99 per barrel and West Texas Intermediate adding 0.55% to $45.66.

On the company front, the earnings season kicked off with aluminium heavyweight Alcoa Inc. releasing its second-quarter results after the closing bell.

Analysts are anticipating a slight rise in revenue and earnings over the previous quarter, but are looking at another year-on-year decline for the company.

Cintas Corp. is also due to report its earnings after markets close.

Banks report results later in the week with JPMorgan Chase & Co. the first of the major US lenders to post earnings on Thursday.