Stocks are seeing modest strength in morning trading on Monday, with the Dow and the S&P 500 reaching their best intraday levels in three months. Buying interest has remained subdued, however, limiting the upside for the major averages.

Currently, the major averages are off their highs of the session but still in positive territory. The Dow is up 12.67 points or 0.1 percent at 25,338.20, the Nasdaq is up 5.89 points or 0.1 percent at 7,651.40 and the S&P 500 is up 5.05 points or 0.2 percent at 2,784.08.

Traders seem reluctant to make more significant moves ahead of the historic summit between President Donald Trump and North Korean leader Kim Jong Un on Tuesday.

Ahead of the meeting, Secretary of State Mike Pompeo indicated the U.S. is prepared to offer North Korea "unique" security assurances in exchange for the complete, verifiable and irreversible denuclearization of the Korean peninsula.

In remarks last Thursday, Trump expressed some optimism about his meeting with Kim but stressed that he is willing to walk away from negotiations.

Trump said his administration has stopped using the term "maximum pressure" with regard to North Korea and suggested the success of the negotiations could be determined by whether he uses the words after the meeting.

In addition to the highly anticipated Trump-Kim meeting, traders are also looking ahead to monetary policy announcements by the Federal Reserve and the European Central Bank.

The Fed is widely expected to raise interest rates by 25 basis points, while the ECB has indicated its meeting will be used to discuss ending its bond purchasing program.

Reports on consumer and producer price inflation, retail sales, and industrial production are also likely to attract some attention this week.

Meanwhile, trade concerns may continue to hang over the after Trump backed out of a joint G7 communiqué over the weekend.

Trump continued to hammer U.S. allies on trade after leaving the G7 summit early in order to attend the meeting with Kim in Singapore.

"Sorry, we cannot let our friends, or enemies, take advantage of us on Trade anymore. We must put the American worker first!" Trump said in a post on Twitter.

Most of the major sectors are showing only modest moves on the day, contributing to the relatively lackluster performance by the broader markets.

Transportation, steel, and natural gas stocks are seeing some strength in morning trading, while interest-rate sensitive utilities stocks have moved to the downside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index rose by 0.5 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.'s FTSE 100 Index has advanced by 0.6 percent, the French CAC 40 Index and the German DAX Index are both up by 0.4 percent.

In the bond market, treasuries have moved lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.1 basis points at 2.968 percent.

by P2PNews Staff Writer

Market AnalysisBB

Image Credit: P2P Media