Stock Market Today: Markets Decline as US-China Trade Tensions Reignite

Major Indexes Point Lower as New Month Begins

The major U.S. stock indexes are starting June on a negative note as renewed trade tensions between the United States and China weigh on investor sentiment. As of early trading on Monday, June 2, 2025, the S&P 500 futures were down 0.53%, Nasdaq-100 futures fell 0.68%, and Dow Jones Industrial Average futures declined 174 points or 0.41%.

This downward movement comes after a strong performance in May, when the S&P 500 climbed 6.15%, breaking a three-month losing streak with its best monthly performance since November 2023. The Dow Jones Industrial Average rose 3.94% last month, while the tech-heavy Nasdaq Composite surged an impressive 9.56%.

Trade Tensions Resurface as Primary Market Concern

The market decline today stems primarily from escalating trade tensions between the world’s two largest economies. China has pushed back against U.S. accusations that it violated the Geneva trade agreement, instead blaming Washington for failing to uphold the deal.

These 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.

Adding to the uncertainty, President Trump’s tariffs have been in legal limbo following two key court rulings last week. The U.S. Court of International Trade struck down some tariffs, but a federal appeals court has temporarily paused this ruling, creating further market confusion.

Tech Giants Face Mixed Outlook

The so-called “Magnificent Seven” stocks, which have outsized influence on market-cap weighted indexes, are showing mixed performance in 2025. Through the first four months of the year, these mega-cap stocks have generally underperformed.

Nvidia (NVDA), which has become the poster child for the AI boom, recently reported that its fiscal first-quarter revenue surged 69% year-over-year to $44 billion. CEO Jensen Huang noted that demand remains “incredibly strong” and is likely to accelerate as AI adoption becomes mainstream.

Apple (AAPL) shares have been under pressure, down approximately 15% year-to-date, with the company facing challenges from tariffs affecting its supply chain. The company recently reported better-than-expected March-quarter results but investors remain concerned about the impact of tariffs on hardware sales.

Microsoft (MSFT) has shown resilience, with shares down just 6.2% this year. The company recently crushed Wall Street’s targets for its fiscal third quarter and guided above views for the current period.

Tesla (TSLA) has been one of the worst performers among the Magnificent Seven, down about 30% year-to-date, though the stock showed signs of recovery with a 3.8% gain in recent trading.

Key Earnings Reports This Week

Investors are looking ahead to several significant earnings reports this week that could move markets:

– Tuesday, June 3: Dollar General (DG), Nio (NIO), CrowdStrike (CRWD), and Hewlett Packard Enterprise (HPE)
– Wednesday, June 4: ChargePoint (CHPT) and MongoDB (MDB)
– Thursday, June 5: Broadcom (AVGO) and DocuSign (DOCU)

Economic Data and Fed Watch

Market participants are also awaiting key economic data this week, with the monthly U.S. employment report scheduled for release on Friday. This report will be closely watched for signs of labor market strength and potential implications for Federal Reserve policy.

Additionally, investors will be monitoring manufacturing data and comments from Federal Reserve Chair Jerome Powell, which could provide insights into the central bank’s thinking on interest rates and economic growth.

Market Outlook

Despite May’s strong performance, some analysts remain cautious about the market’s near-term prospects. Morgan Stanley’s Chris Toomey suggested that markets might remain “range-bound,” noting that while the worst-case scenario regarding tariffs may have been avoided, the market is currently pricing in a best-case scenario that may be overly optimistic.

As global trade tensions continue to simmer and with important economic data and earnings reports on the horizon, investors should prepare for potential volatility in the days ahead as markets navigate these complex crosscurrents.