By Sruthi Shankar and Nikhil Sharma

(Reuters) -Futures tracking the S&P 500 and Nasdaq touched record highs on Monday, as optimism over U.S. trade negotiations with its key partners helped support upward momentum in markets.

Shares of technology heavyweights rose premarket after Canada scrapped its digital services tax targeting U.S. tech firms, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States.

Shares of Amazon, Apple, Alphabet and Meta Platforms edged up in the range of 0.5% and 2%.

The benchmark S&P 500 and the tech-heavy Nasdaq Composite rose to all-time highs on Friday, as bets of deeper U.S. interest rate cuts and renewed optimism around AI helped markets rebound from the months-long tumult sparked by U.S. President Donald Trump's tariff policies and geopolitical tensions.

The blue-chip Dow remained 2.7% below its record closing high reached on December 4.

"The hope of rapid trade deals between the U.S. and its main trading partners is acting as a positive tailwind to the market. Thus, momentum could be a big driver of markets in the coming days and weeks," said Kathleen Brooks, research director at XTB.

Focus now shifts to a July 9 deadline for countries to reach deals with the United States or see tariffs spike higher, but Trump has said he could extend the tariff deadline or "make it shorter".

Investors are also looking into economic data and fiscal policy developments to see if the latest bull run in U.S. stocks can continue.

U.S. Senate Republicans pushed President Donald Trump's sweeping tax cut and spending bill forward in a marathon weekend session. Senators are scheduled to start voting on a potentially long list of amendments to the bill beginning at 9 a.m. EDT (1400 GMT) Monday.

Key economic data releases this week include monthly non-farm payrolls and the Institute for Supply Management's survey on manufacturing and services sectors for June. Several U.S. central bank officials including Federal Reserve Chair Jerome Powell are scheduled to speak later this week.

A raft of soft economic data and expectations that Trump will replace Powell with someone dovish have pushed up bets of rate cuts from the Fed this year.

Traders are pricing in a 73.8% likelihood of the first Fed rate cut of the year in September, while assigning a 21.2% probability to a rate cut coming as soon as July, according to CME's FedWatch tool.

At 06:46 a.m. ET, S&P 500 E-minis were up 27.25 points, or 0.44%. Nasdaq 100 E-minis were up 149.75 points, or 0.66%, and Dow E-minis were up 219 points, or 0.5%.