1. China strikes back: Beijing says that tariffs on about $3 billion worth of US imports are going into effect Monday, hitting 128 products ranging from pork to steel pipes.
The sanctions include tariffs of 15% on 120 American products -- such as fruits, nuts, wine and steel pipes -- and 25% on eight other products, including pork and recycled aluminum.
First proposed 10 days ago, the penalties are a response to President Donald Trump's tariffs on imports of steel and aluminum from China and some other countries.
Experts fear that tit-for-tat retaliatory measures could turn into a trade war.
"Trade dispute will continue to dominate investors' decisions heading into the second quarter," said Hussein Sayed, Chief Market Strategist at FXTM.
2. Second quarter kickoff: US stock futures were pointing lower on the first trading day of the second quarter.
Investors are eager to turn the page on the first three months of the year, which were marked by increased volatility.
The Dow lost more than 2% in the first quarter -- snapping its longest quarterly win streak in 20 years, and marking the worst performance since 2015.
European markets were closed on Monday. Asian markets ended mixed.
Gold prices jumped 0.6% following the Chinese tariff announcement as investors looked for safe havens.
3. Thursday market recap: The Dow added 1.1% on the final day of trading before the holiday break, while the S&P 500 gained 1.4% and the Nasdaq closed 1.6% higher.
4. Bahrain's big find: Bahrain has discovered its biggest oil field since 1932, according to the kingdom's official news agency.
The agency said the new oil field is forecast to contain "highly significant quantities" of oil and gas. It said the find it "understood to dwarf Bahrain's current reserves," but did not give details on volume.
Bahrain is not a member of OPEC, but it has signed an agreement with the cartel and other major producers to curtail output. That deal, which runs until the end of 2018, is designed to rid markets of excess oil and support prices.
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5. Companies and economics: Alibaba (BABA) said Sunday it is buying the part of online food delivery service Ele.me it doesn't already own, in a deal that values the startup at $9.5 billion.
The Institute for Supply Management will release its US manufacturing report for March at 10 a.m. ET.
An official government index that tracks manufacturing activity in China jumped in March. But a second index produced by Chinese media group Caixin, which places more weigh on smaller firms, declined.
"This suggests that while the recent easing of pollution controls has led to a rebound in heavy industry, broader economic activity may not have picked up much as a result," said Julian Evans-Pritchard, senior China economist at Capital Economics.
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6. Coming this week:
Monday — Manufacturing ISM report
Tuesday — Spotify IPO expected
Wednesday — ADP National Employment Report
Thursday — February trade deficit report
Friday — US jobs report
