Wall Street opened June with modest gains on Monday (Tuesday AEST), as investors monitored intensifying global trade tensions.
The Dow Jones Industrial Average edged up 35.4 points, or 0.1%, to finish at 42,305.5, while the S&P 500 advanced 24.3 points, or 0.4%, to close at 5,935.9. The Nasdaq Composite added 128.9 points, or 0.7%, ending at 19,242.6.
Rising tensions between the United States and China returned to the spotlight after Beijing rejected claims it had breached a temporary trade agreement. Instead, Chinese officials blamed Washington for failing to adhere to the terms, a sign that bilateral negotiations are again faltering.
The renewed friction follows a short reprieve in May when U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng agreed in Geneva to a 90-day pause on most tariffs.
However, a senior White House official told CNBC’s Eamon Javers that President Donald Trump and Chinese President Xi Jinping are expected to speak later this week - a potential sign of resumed dialogue.
Tensions with Europe also escalated after Trump announced the doubling of steel tariffs to 50%, a move the European Union condemned as undermining ongoing trade talks. A spokesperson for the European Commission warned the decision “adds further uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic.”
Despite the fraught international backdrop, steel stocks rallied. Cleveland-Cliffs jumped 23.2%, while Steel Dynamics added 10.3% and Nucor gained 10.1% in Monday’s session, buoyed by the anticipated tariff-driven price advantages.
On the data front, U.S. manufacturing activity contracted for the third consecutive month in May, according to the Institute for Supply Management (ISM), coming in at 48.5 versus 49.5 expected. Key indicators within the manufacturing sector weakened further, with new orders and order backlogs both falling.
Production levels declined, and manufacturers also reported job losses across the sector.
On the bond markets, yields moved higher. The 10-year Treasury note rose to 4.442%, while the 2-year yield increased to 3.939%, both up 1% on the day.
