Jamie McGeever
8 min read
In This Article:
By Jamie McGeever
ORLANDO, Florida (Reuters) - TRADING DAY
Making sense of the forces driving global markets
By Jamie McGeever, Markets Columnist
The new trading month got off to a cautious start on Monday, with risk appetite sapped by the U.S.-China trade standoff and bubbling military tensions around the world, although a closely-watched tracking estimate of U.S. growth helped drive a late rally on Wall Street.
In my column today I look at how, despite the drop in profits in the first quarter, corporate America is well-prepared to face the economic storm that may be coming its way. Indeed, corporate America has rarely been in better shape. More on that below, but first, a roundup of the main market moves.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. ECB faces surging euro conundrum: Mike Dolan 2. Playing it smart: Five questions for the ECB 3. Weak dollar reprises its role as 'carry' trade funder 4. BOJ urged to keep or slow bond taper pace from fiscal2026 5. Trump tax bill poses limited benefits, higher costs forlower-income Americans
Today's Key Market Moves
* U.S. stocks rise, led by the energy sector and some BigTech names like Meta and AMD. The S&P 500 rises 0.4%, and theNasdaq gains 0.7%. * The dollar falls 0.6% on an index basis to a six-weeklow, losing ground against all its peers. Biggest winner is thekiwi dollar, up more than 1% to a 7-month high of $0.6039. * U.S. crude oil jumps as much as 4% intraday after OPEC+keeps its output increase unchanged. WTI nudges $64/bbl, Brentclimbs 2% above $65/bbl. * U.S. Treasuries fall across the board, most heavily at thelong end where yields rise 7 bps and steepen the curve. * Gold leaps 2.8% to $3,380/oz, boosted by tarifftensions, geopolitical concerns and the weaker dollar.
Trade tension turns to tentative hope
The first trading day of June was sticky for stocks, bad for bonds and downbeat for the dollar, with tariff concerns once again top of investors' minds.
Wall Street got off to a tepid start, perhaps understandably given how well it performed the month before. According to Citi's Stuart Kaiser, U.S. stocks outperformed Treasuries in May by the widest margin since October 2022.
The S&P 500 rose 6.2% to break its first three-month losing streak in five years while the 10-year Treasury's total return was -1.57%, giving stocks their widest winning margin over bonds for a single month since October 2022.
But a sense of cautious optimism emerged as the session progressed, and the main indices rebounded. Two developments were worth noting.
