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US stocks pared earlier losses on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May.
The Dow Jones Industrial Average (^DJI) fell around 0.3%, or around 150 points. The S&P 500 (^GSPC) was roughly flat, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.3%
China hit back at President Trump's claim that it violated the Geneva tariff truce on Monday, blaming the US instead for failing to keep up its end of the deal. The mutual finger-pointing has undermined hopes for a revival of trade talks between the two top economies and stoked lingering trade uncertainty.
The escalation comes after Trump ratcheted up pressure on Friday with a threat to double US tariffs on imported steel and aluminum to 50% from 25%. While a federal court last week struck down significant portions of Trump's duties, easing market fears, a higher court temporarily reinstated the duties a day later to allow legal proceedings to continue.
The US dollar (DX-Y.NYB) fell as markets assessed trade-war risks, with rising inflation and slowing growth in particular focus. Meanwhile, gold (GC=F) futures rose amid demand for safer assets, as Ukraine's dramatic drone strikes on Russia on Sunday added geopolitical worries to trade fears.
In US stocks, the tepid start to June follows a standout May: The S&P 500 (^GSPC) rallied more than 6% in its best month since November 2023 and best May since 1990.
Against this backdrop, all eyes now turn to a critical slate of economic data this week — most notably the May nonfarm payrolls report due Friday, which will offer fresh clues on how trade frictions and interest rate expectations are shaping the broader US economy. On Monday, new data from the Institute for Supply Management showed economic activity in the US manufacturing sector continued to contract in May as imports tumbled to their lowest level since 2009.
Any tariff-spurred rise in inflation is likely to be temporary, and that means the Federal Reserve will be able to make "good news" interest rate cuts in 2025, Fed governor Christopher Waller said on Monday. Wall Street is waiting to hear whether Fed Chair Jerome Powell and other officials echo that view in their own speeches later in the day.
Earnings season is almost wrapped, with results from CrowdStrike (CRWD), Broadcom (AVGO), DocuSign (DOCU), and Lululemon (LULU) the main points of interest in a smaller week of reports.
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The 'Magnificent 7' are leading the market again
The S&P 500 just logged its best May in more than 30 years in large part due to the return of dominance from the "Magnificent Seven" tech stocks.
In May, Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined for 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain, with Apple ending the month as the lone laggard.
DataTrek Research co-founder Nichola Colas wrote in a note to clients that the recent outperformance of big tech shows "this important slice of the US equity market has genuine momentum."
"The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added.
Subway-owner Roark Capital buys Dave's Hot Chicken for $1 billion
Ford, GM slide on increased steel, aluminum tariffs
Ford (F) and General Motors (GM) stock were both down about 5% on Monday as investors digested President Trump's latest tariff threat.
The moves come after Trump said Friday he will be doubling current tariffs on steel and aluminum, from 25% to 50%.
Tesla stock slips as sales in key European markets crater
Yahoo Finance's Pras Subramanian reports:
Manufacturing activity contracts further in May, imports hit lowest level since 2009
In May, economic activity in the US manufacturing sector contracted further.
The Institute for Supply Management's (ISM) manufacturing PMI registered a reading of 48.5 in May, up from April's reading of 48.7. Readings above 50 for this index indicate an expansion in activity, while readings below 50 indicate contraction. The manufacturing sector has been in contraction for most of the past two years.
The import index tumbled to a reading of 39.9, its lowest level since 2009.
“Imports continue to contract as demand has reduced the need to maintain import levels from previous months, as well as due to the impact of tariff pricing,” Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in the release.
A separate reading on manufacturing activity from S&P Global, also released on Monday, registered a reading of 52, up from a prior reading of 50.2. But S&P global chief business economist Chris Williamson wrote in the release the headline data "masks worrying developments under the hood" of the US manufacturing sector.
"While growth of new orders picked up and suppliers were reportedly busier as companies built up their inventory levels at an unprecedented rate, the common theme was a temporary surge in demand as manufacturers and their customers worry about supply issues and rising prices," Williamson wrote.
Stocks slip at the open
US stocks pulled back on Monday after China added fuel to simmering trade tensions with the US, setting investors on guard as they turned the page on a bullish May.
The Dow Jones Industrial Average (^DJI) fell around 0.4%, or around 170 points. The S&P 500 (^GSPC) declined nearly 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) ticked lower by about 0.2%.
Biotechs gain in premarket trading
Several biotech stocks jumped ahead of the opening bell:
BioNTech (BNTX) stock popped 12% on news of a new cancer drug deal. Bristol Myers Squibb (BMY) announced it will pay the German biotech company $11.1 billion to license a next-generation cancer drug as it looks to compete with Merck (MRK) and its drug Keytruda.
Moderna (MRNA) stock added more than 3% in premarket trading after the FDA approved its COVID-19 vaccine for individuals 65 and older and those ages 12-64 with an underlying condition.
Blueprint Medicines (BPMC) soared 26% after Sanofi (SNY) agreed to acquire the company for as much as $9.5 billion in a deal expected to close in the third quarter. The acquisition adds Blueprint's Ayvakit drug to Sanofi's portfolio, boosting its rare immunology profile. Sanofi stock edged lower.
Cleveland-Cliffs stock soars 26% after Trump says he will double steel tariffs
Shares of US steelmaker Cleveland-Cliffs (CLF) soared as much as 26% in premarket trading Monday while foreign steel stocks slumped.
The moves came after President Trump announced on Friday that steel and aluminum tariffs would double from 25% to 50% starting June 4.
US-based Nucor (NUE) and Steel Dynamics (STLD) also popped more than 10% in premarket trading.
Shares of US Steel Corporation (X), which is being taken over by Nippon (NPSCY), fell slightly.
South Korean steel stocks Posco (PKX) and Hyundai Steel (004020.KS) also dropped 1.5% and 2.6%, respectively. Reuters reports that Hyundai Steel announced a plan to build a $5.8 billion factory in Louisiana, but the factory will not open until 2029.
Tesla stock slips as Europe sales spiral lower — but not in Norway
Tesla's (TSLA) sales in Norway soared over 200% in May, thanks to strong deliveries of the revamped Model Y — but elsewhere in Europe, the EV maker's sales rout continues.
Cratering demand has turned up the heat on CEO Elon Musk, who has pledged to be "super focused on Tesla" as he quits his DOGE role and returns to the office, as my colleague Pras Subramian reports.
Shares in Tesla slid 1.6% in pre-market trading as investors absorbed the latest negative data.
Reuters reports:
Read more here.
Oil surges after OPEC+ plans smaller output hike than expected
Crude oil futures jumped on Monday after OPEC+ decided to hike output in July at a lower rate than traders had feared.
The group of leading oil producers agreed on Saturday to add 411,000 barrels a day of supply next month, the same level of increase as for May and June.
West Texas Intermediate (CL=F) climbed about 4% to $63.25 a barrel. International benchmark Brent (BZ=F) crude futures rose 3.7% to $65.07.
Bloomberg reports:
Good morning. Here's what's happening today.
How Trump's tariffs turned the 'TACO' trade into Wall Street's biggest debate
Europe stocks the clear winners amid Trump's trade war
Stock markets in Germany and elsewhere are staging a world-beating rally, far outperforming the S&P 500 (^GSPC) this year as President Trump's trade-war push to boost US fortunes apparently backfires.
Bloomberg reports:
Asian markets slide as geopolitical tensions rise
Asian stocks fell on Monday, weighed down by escalating geopolitical tensions and fresh trade friction between the US and China.
Hong Kong’s Hang Seng Index (^HSI) led regional losses, sinking 2.2% as renewed sparring between Beijing and Washington spooked investors.
Markets in mainland China were closed for a public holiday, but a doubling of steel tariffs to 50% due to take effect Wednesday is set to hit markets as they reopen Tuesday.
Elsewhere in Asia, Japan’s Nikkei 225 (^N225) declined 1.4%, South Korea’s Kospi (^KS11) shed 0.3% and Australia’s S&P/ASX 200 (^AXJO) edged down 0.2%.
