Stock Market Today: Futures Fall as US-China Trade Tensions Reignite

Market Overview: Futures Point to Lower Open on Monday

Stock futures are pointing to a lower open on Monday, June 2, 2025, as renewed tensions between the United States and China weigh on investor sentiment. The downturn comes after China pushed back against U.S. accusations that it had violated the Geneva trade agreement, instead blaming Washington for failing to uphold the deal.

As of early Monday morning, S&P 500 futures are down 0.53%, Nasdaq-100 futures have fallen 0.68%, and Dow Jones Industrial Average futures have declined 174 points, or 0.41%. This pullback follows a strong performance in May, where the S&P 500 gained 6.15%, the Nasdaq Composite surged 9.56%, and the Dow Jones Industrial Average rose 3.94%.

Trade Tensions Resurface After Brief Pause

The market decline comes as trade negotiations between the world’s two largest economies show signs of deterioration. Tensions have reignited following a brief pause after U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Geneva and agreed to a 90-day suspension of most tariffs.

National Economic Council director Kevin Hassett suggested on Sunday that President Donald Trump and China’s President Xi Jinping could have a conversation about trade as soon as this week, potentially providing some clarity on the situation.

The legal status of President Trump’s tariffs remains in flux after contradictory court rulings last week, adding another layer of uncertainty to the market outlook.

Tech Stocks Lead May’s Market Rally

Despite today’s projected decline, technology stocks were the standout performers in May, with several “Magnificent 7” companies posting impressive gains. Nvidia Corporation (NVDA) led the pack with a remarkable 24.06% surge for the month, while Tesla Inc (TSLA) followed closely with a 22.79% gain.

Other tech giants also performed well in May, with Microsoft Corporation (MSFT) rising 16.47%, Meta Platforms Inc (META) gaining 17.94%, Amazon.com Inc (AMZN) up 11.6%, and Alphabet Inc (GOOGL) climbing 8.15%. Apple Inc (AAPL) was the only Magnificent 7 stock to decline, dropping 5.48% during the month.

Nvidia continues to ride the AI wave, with the chipmaker approaching record highs following strong earnings and revenue outlook last week, despite U.S. restrictions on sales of its chips in China. The company’s performance has been a key driver of the broader market’s recovery from April’s tariff-induced selloff.

Key Economic Events This Week

Investors will be closely watching several important economic events this week that could significantly impact market direction:

1. **Fed Chair Jerome Powell speaks**: Powell will deliver opening remarks at the Federal Reserve Board’s International Finance Division 75th Anniversary Conference at 1 pm ET today (Monday, June 2). His comments will be scrutinized for hints about the Fed’s stance on interest rates amid ongoing trade tensions.

2. **Manufacturing data**: Today will also see the release of the S&P Global Final U.S. Manufacturing PMI and ISM Manufacturing PMI for May, along with construction spending figures for April.

3. **Job market indicators**: Tuesday brings the Job Openings and Labor Turnover Survey (JOLTS) for April, while Wednesday features ADP employment data for May.

4. **Weekly jobless claims**: Thursday’s unemployment insurance claims data will be closely watched as investors look for evidence of tariff impacts on the job market.

5. **Nonfarm payrolls report**: The week culminates with Friday’s crucial jobs report for May. Analysts expect hiring, wage, unemployment, and participation data to reflect a resilient jobs market, with estimates pointing to around 150,000 new jobs added in May, down from April’s 177,000.

Notable Earnings Reports

Several significant earnings reports are scheduled for this week, including:

– **Tuesday**: CrowdStrike Holdings (CRWD), Hewlett Packard Enterprise (HPE), Dollar General (DG), and NIO (NIO)

– **Wednesday**: Dollar Tree (DLTR), Five Below (FIVE), and PVH Corp (PVH)

– **Thursday**: Broadcom (AVGO) and Lululemon Athletica (LULU)

Broadcom’s report will be particularly noteworthy following Nvidia’s strong performance, as investors look for further confirmation of continued demand for AI-related products. The chipmaker reported a 77% jump in AI-related revenue in its most recent financial release.

Market Outlook

Despite May’s strong performance, some analysts remain cautious about the market’s near-term prospects. Morgan Stanley’s Chris Toomey suggested on Friday that the market might remain range-bound, noting that while the worst-case scenario regarding tariffs has been avoided, current prices may be reflecting an overly optimistic best-case scenario.

The ongoing trade tensions between the U.S. and China, coupled with this week’s economic data releases and Fed Chair Powell’s comments, will likely determine whether the market can build on May’s momentum or face a correction as we move deeper into June.

Investors should pay particular attention to Friday’s jobs report, as it could provide crucial insights into the health of the U.S. economy and potentially influence the Federal Reserve’s interest rate decisions in the coming months.