NEW YORK — On Monday, U.S. stock indexes inched closer to their record highs, coming on the heels of a stellar May performance, which marked the best month for Wall Street since early 2023.
The S&P 500 advanced by 0.4% after shaking off a morning loss. Meanwhile, the Dow Jones Industrial Average gained 35 points, equivalent to 0.1%, and the Nasdaq composite surged by 0.7%. These indexes initially dropped almost 1% earlier in the day due to some dispiriting updates concerning U.S. manufacturing activity.
President Donald Trump has cautioned that American businesses and consumers might experience some discomfort as he pushes tariffs to try to restore more manufacturing jobs stateside. This tariff approach, consisting of sporadic rollouts, has significantly contributed to economic uncertainty. Despite this, stock markets regained footing throughout the day, buoyed by gains in a few essential stocks which, in turn, helped the S&P 500 climb even though a larger number of stocks experienced declines. For instance, Nvidia saw an uptick of 1.7%, and Meta Platforms appreciated by 3.6%.
The oil market witnessed vigorous activity on Monday, with crude prices jumping more than 3%. This came after OPEC+ countries decided to ramp up production again—a decision typically associated with price drops due to an increase in supply, although analysts noted that the market had widely anticipated this move. Escalating geopolitical tensions, such as Ukraine’s recent attacks in Russia, contributed further to uncertainty about global oil and gas flows.
The market’s movements also followed renewed tensions between the U.S. and China, occurring only weeks after both nations agreed to halt many of their tariffs aimed at averting economic downturns. China accused the U.S. of harming its interests by introducing guidelines to control AI chip exports, halting sales of chip design software, and revoking Chinese student visas. The Chinese Commerce Ministry stated that such actions “seriously violate the consensus” reached during previous trade discussions. These comments followed President Trump’s allegations last week that China hasn’t honored its share of the tariff truce agreement.
Optimism surrounding potential trade deals and reduced tariffs has been a critical driver of last month’s Wall Street rally, bringing the S&P 500 within 3.8% of its all-time high after it had plunged roughly 20% in April. Yet, on Friday, Trump informed Pennsylvania steelworkers of plans to double the steel import tariff to 50% to secure their industry, a steep hike likely to raise prices for vehicles, housing, and other goods. This led to a surge in U.S. steelmaker stocks, with Nucor climbing 10.1% and Steel Dynamics soaring 10.3%.
On the downside, automakers and other significant consumers of steel and aluminum faced losses. Ford and General Motors both declined by 3.9%. By the end of the day, the S&P 500 closed 24.25 points higher at 5,935.94. The Dow Jones Industrial Average increased by 35.41 to reach 42,305.48, while the Nasdaq composite rose 128.85 to 19,242.61. In a dramatic shift, Lyra Therapeutics saw its stock skyrocket nearly 311% after announcing favorable late-stage trial outcomes for a sinus inflammation treatment implant.
On the bond frontier, Treasury yields edged higher amid ongoing concerns over how much debt the U.S. government will amass with its plans to reduce taxes and expand the deficit. The 10-year Treasury yield climbed to 4.44% from a previous 4.41% and from just 4.01% approximately two months back—a significant shift within the bond market. Increased Treasury yields heighten borrowing costs for U.S. households and businesses, dissuading investors from splurging on high-priced stocks and other assets. Yields briefly dipped during the morning, rebounding after manufacturing data indicated the tangible impact of Trump’s tariffs on the economy.
One transportation equipment industry respondent in the Institute for Supply Management survey expressed that the present administration’s shifting trade strategies have made it difficult for suppliers to remain flexible and profitable. Though a separate report from S&P Global on manufacturing beat expectations, deeper analysis showed underlying challenges within the U.S. manufacturing sector, where tariffs evoke concerns over supplier delays and rising costs, according to Chris Williamson, the chief business economist at S&P Global Market Intelligence.
Internationally, stock markets saw declines, with Hong Kong’s Hang Seng falling 0.6% in response to the rising tensions between the U.S. and China. Over the weekend, reports surfaced indicating China’s factory activity had contracted in May, albeit at a slower rate than in April. Stock indexes across other regions in Asia and Europe also witnessed downturns, with Japan’s Nikkei 225 dropping a notable 1.3%.