See All Market Updates LiveMajor Indexes Under Pressure as Trade War Concerns Return
The major U.S. stock indexes are trading lower at midday on Monday, June 2, 2025, as renewed trade tensions between the United States and China weigh on investor sentiment. The S&P 500 is down 0.53%, the Nasdaq Composite has fallen 0.68%, and the Dow Jones Industrial Average has declined 0.41%, erasing some of the strong gains achieved in May.
Last month marked the strongest performance for U.S. equities since November 2023, with the S&P 500 gaining 6.2% and the Nasdaq surging 9.6% in May. However, the positive momentum has been disrupted by President Trump’s announcement to increase U.S. steel and aluminum tariffs from 25% to 50% starting June 4th, prompting China to threaten retaliatory measures.
Trade War Escalation Dominates Market Sentiment
The deterioration in U.S.-China trade relations has become the primary market concern today. China’s commerce ministry has accused the U.S. of violating the terms of the trade truce agreed upon last month in Geneva, while U.S. officials maintain that China failed to uphold its end of the agreement.
National Economic Council Director Kevin Hassett suggested that President Trump and Chinese President Xi Jinping might discuss trade as early as this week, but uncertainty remains high as China has vowed to take steps to defend its interests.
Tech Stocks Feel the Pressure
Technology companies, particularly those with significant exposure to China, are among the hardest hit today. Despite their strong performance in recent months, the “Magnificent Seven” tech giants are showing mixed results at midday.
Apple (AAPL) is extending Friday’s losses, currently down 1.2% at $201.47, following its recent earnings report. The company faces potential challenges from increased tariffs on its hardware products.
Nvidia (NVDA), which has been a market leader during the AI boom, is down 1.5% at $135.22, despite recently delivering a strong outlook for revenue. The company continues to navigate U.S. restrictions on sales of its chips in China.
Key Economic Data and Fed Watch
Investors are closely monitoring today’s economic releases, with the ISM Manufacturing PMI for May scheduled for 2:00 PM ET. Economists forecast a reading of 49.3, which would represent an improvement from April’s 48.7 but still indicate contraction in the manufacturing sector (below 50).
Perhaps more significantly, Federal Reserve Chair Jerome Powell is set to speak at 5:00 PM ET. His comments will be scrutinized for any hints about the Fed’s stance on monetary policy amid the current trade tensions and recent inflation data.
Commodities and Safe Havens Rally
The risk-off sentiment has boosted traditional safe-haven assets. Gold prices have jumped 2% today as investors seek protection from market volatility. Oil prices have also rebounded strongly after last week’s slump, supported by OPEC+ maintaining current production levels and increased geopolitical tensions following Ukrainian drone strikes on Russian airfields.
Looking Ahead: Key Events This Week
This week’s economic calendar is packed with market-moving events. After today’s ISM Manufacturing data and Powell’s speech, investors will focus on Tuesday’s JOLTS Job Openings report and several notable earnings releases, including CrowdStrike (CRWD) and Hewlett Packard Enterprise (HPE).
Wednesday brings the ADP Employment Change and ISM Services PMI, while Thursday features the weekly jobless claims report and earnings from tech heavyweight Broadcom (AVGO) and retail favorite Lululemon (LULU).
The week culminates with Friday’s crucial Nonfarm Payrolls report, with economists forecasting 130,000 new jobs in May, down from 177,000 in April. The unemployment rate is expected to hold steady at 4.2%.
As trade tensions, economic data, and Fed policy expectations converge, market volatility could remain elevated throughout the week, potentially setting the tone for the early summer trading season.