Wall Street Tiptoes into June Amid Mixed Trading as Oil Prices Jump
NEW YORK (AP) — U.S. stocks are experiencing a slow start on Monday as they ease into June following a robust performance in May, which marked their strongest month since 2023.
At early trade, the S&P 500 showed a slight decrease of 0.1%. The Dow Jones Industrial Average was down by 149 points, or 0.4%, while the Nasdaq composite saw a modest increase of 0.2%.
Significant activity was observed in the oil market, with crude prices rising by roughly 4%. This surge follows the decision by the OPEC+ alliance to increase oil production, a move typically associated with declining crude prices due to increased market supply. However, this was largely anticipated by investors. Recent attacks by Ukraine in Russia further contributed to the uncertainty surrounding global oil and gas flows.
U.S. crude prices climbed by 3.8% to $63.11 per barrel, while Brent crude, the international benchmark, rose by 4.3% to reach $65.50.
The market fluctuations also coincided with renewed tensions between the world’s two largest economies. A mere few weeks after agreeing to pause tariffs potentially harmful to the global economy, China criticized the U.S. for measures perceived as detrimental to Chinese interests. This includes the introduction of export control guidelines on AI chips, halting the sale of chip design software to China, and the planned revocation of Chinese student visas.
The Chinese Commerce Ministry’s statement emphasized that these actions “seriously violate the consensus” reached during trade discussions in Geneva last month. This follows President Donald Trump’s allegations last week that China was not adhering to the agreement to halt mutual tariffs.
Optimism over reduced tariffs due to potential trade agreements was a driving factor behind last month’s rally in stocks, which brought the S&P 500 within 3.8% of its all-time high, after having dropped nearly 20% in April.
However, President Trump recently announced to Pennsylvania steelworkers an increase in the tariff on steel imports to 50%, a move designed to protect domestic industry but also likely to raise prices for steel-utilizing sectors such as housing and automotive.
Furthermore, Trump confirmed an increase in aluminum tariffs alongside steel, both set to double to 50%, effective Wednesday.
As a result, U.S. steelmaker stocks rose noticeably—Nucor surged 12.1%, and Steel Dynamics jumped 13.4%. In contrast, shares of automakers and heavy metal users saw declines, with Ford dropping 2.7% and General Motors reversing by 2.4%.
Internationally, Hong Kong’s Hang Seng decreased by 0.6% following the tense exchange between the U.S. and China, coupled with reports of contracting Chinese factory activity in May, albeit at a slower rate than in April.
Other Asian and European markets also experienced downturns. Japan’s Nikkei 225 notably fell by 1.3%.
In the bond market, Treasury yields rose amid ongoing concerns regarding the potential accumulation of U.S. government debt due to plans involving tax cuts and deficit increases. The 10-year Treasury yield increased to 4.43% from 4.41% late Friday and from 4.01% about two months prior, marking substantial movement for the bond market.
These rising yields translate to higher borrowing costs for U.S. households and businesses, potentially deterring investors from paying high prices for stocks and other risky investments.
