US stock markets fell on Monday, mirroring the decline in global markets as trade tensions between the US and China escalated. Investors remained cautious ahead of upcoming US employment data and the expected interest rate cut from the European Central Bank.
The S&P 500 and Dow Jones opened the first trading day of the month with losses, while the Nasdaq index saw only limited change, influenced by technology stocks.
The dollar weakened under pressure from renewed trade conflicts, while US bond yields rose slightly. On Sunday, US Treasury Secretary Scott Bessent announced that President Trump would soon meet with Chinese President Xi Jinping to discuss the progress of the agreement to reduce tariffs on critical metals. Trump had alleged that China had violated the agreement. China, however, described the accusation as “baseless” and announced it would take strong measures to protect its interests.“Uncertainty is real, and markets are reacting negatively to it,” said Oliver Pursche, senior vice president at Wealthspire Advisors. “Investors don’t know what to expect. Trump’s unpredictability is known, but his ego may prevent him from backing down.”
According to a report published by the Institute for Supply Management, the US manufacturing sector contracted more sharply than expected in May, while construction spending in April also declined unexpectedly.
The Dow Jones Industrial Average fell by 211.67 points.
The US dollar fell by 0.50% to 42,058.40, while the S&P 500 index dropped 15.20 points (0.26%) to 5,896.49. The Nasdaq Composite Index fell by 12.94 points (0.07%) to 19,100.83. European stocks also fell on Friday after Trump announced he would raise tariffs on imported steel and aluminum to 50% from June 4. This move, accompanied by threats of retaliation from the European Union, put pressure on steel exporters’ shares.
