U.S. stocks began June with cautious optimism as the S&P 500 rose 0.5%, reversing early losses sparked by renewed U.S.-China trade tensions. The Dow Jones Industrial Average climbed 35 points (0.1%), while the Nasdaq 100 advanced 0.7%, lifted by strength in technology and energy sectors.
The rebound followed a robust May, where the S&P 500 posted a 6.1% gain—its strongest monthly performance since November 2023.
Trade tensions, however, threatened to sour sentiment. President Donald Trump announced plans to double tariffs on steel imports to 50%, effective June 4. Beijing rejected Trump’s claims that it violated a Geneva-based trade agreement reached in mid-May and vowed to defend its economic interests.
Trade, Tariffs, and Fed Signals in Focus
Washington’s standoff with Beijing escalated following comments from Treasury Secretary Scott Bessent, who said talks had stalled. China, meanwhile, denied breaking the Geneva agreement, which had paused triple-digit tariffs and promised relief on metal exports critical to U.S. tech and defense.
Commerce Secretary Howard Lutnick affirmed over the weekend that tariffs will remain in place, even amid ongoing legal disputes. A federal trade court temporarily blocked the tariffs last week, but an appeals court quickly reinstated them. A Supreme Court review is expected.
Key macroeconomic events this week include:
- S&P and ISM PMIs (Purchasing Managers’ Index)
- Fed speakers, including Chairman Jerome Powell
- May nonfarm payrolls report, expected to show 130,000 jobs added, down from 177,000 in April
Remarks from Fed officials hinted at potential rate cuts, contingent on inflation and labor data. Fed Governor Christopher Waller said inflation from tariffs was likely short-lived, while Chicago Fed President Austin Goolsbee noted easing uncertainty could pave the way for policy shifts.
Sector Highlights: Tech, Metals, Energy
Corporate performance was mixed as tariff and trade concerns took center stage.
- Chip stocks including Nvidia (NVDA), Marvell (MRVL), and TSMC (TSM) pared losses despite reports the White House may tighten export restrictions on subsidiaries of Chinese firms.
- Aluminum and steel stocks rallied on tariff news. Notables included:
- Cleveland-Cliffs (CLF)
- Nucor (NUE)
- Steel Dynamics (STLD)
- Energy stocks soared after OPEC+ announced a July production hike of 411,000 barrels/day, matching previous months. Gainers included:
- APA Corp (APA)
- EQT Corp (EQT)
- Coterra Energy (CTRA)
As geopolitical tensions and economic data converge, investors remain focused on whether June can extend the market’s momentum—or stall under policy pressure.
