Associated Press Business Writer Stanchion
NEW YORK (AP) — US stocks have fallen Monday after several disappointing updates regarding US manufacturing, the area of the economy President Donald Trump is trying to revive through his trade war and tariffs.
The S&P 500 was 0.5% lower in morning trading. The Dow Jones industrial average was 319 points (0.8%) as of 10:15am Eastern time, while the Nasdaq Composite was 0.4% lower.
The stocks sank after a report from the Supply Management Institute said more US manufacturing activity had been reduced than economists had expected. Trump warns that American businesses and households can feel some pain when they try to use tariffs to bring more manufacturing jobs back to the country, but their on and off rollouts create a lot of uncertainty.
“The impact of the current administration’s ever-changing trade policy has wreaked havoc on the response of its suppliers and their ability to maintain profitability,” one company in the ISM survey said.
“Reducing government spending, delays and tariffs are driving hell with businesses. They are not willing to take on stock risk,” said another person in the computer and electronics products industry.
“We are committed to providing a range of services to our customers,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence. He said the uncertainty caused by tariffs is concerned about supplier delays and price increases.
Monday’s move also came after harsher rhetoric crossed between the two biggest economies in the world just weeks after the US and China agreed to suspend many of the tariffs that threatened to drag the economy into a recession.
China on Monday blows up the US over moves that it said would hurt China’s interests, including issuing AI chip export control guidelines, halting the sale of chip design software to China and planning to cancel Chinese student visas.
“These practices violate a serious consensus,” the Commerce Department said in a statement that they reached during trade talks in Geneva. That followed President Donald Trump’s accusations at the end of last week. There he said that China has not lived to the end of an agreement in which they suspended their tariffs with one another.
We hope that tariffs will fall due to trade contracts that Trump can reach with other countries. The main reason for a big gathering on Wall Street last month, the S&P 500 has returned to within an all-time high of 3.8%. The index had fallen about 20% from the mark in April.
But Trump told Pennsylvania steel workers on Friday that he was protecting the industry by doubling tariffs on steel imports by doubled to 50%.
Later in his post about his true social platform, Trump confirmed steel prices and said that tariffs on aluminum would also double to 50%. Trump said both tariff hikes will take effect Wednesday.
It helped our steel manufacturer stocks climb. Nucor jumped 10.7%, while Steel Dynamics rose 10.4%.
However, automakers and other heavy users of metals have weakened. Ford fell 4.1% and General Motors rebounded 4.2%.
Some of Monday’s most powerful actions were in the oil market, where crude prices rose by around 3%. The countries of OPEC+ Alliance have decided to increase production again. This is a move that often pushes down crude oil prices as it is on the market, but analysts said investors are looking forward to it widely. Last weekend’s attacks by Ukraine in Russia also helped to raise uncertainty about oil and gas flows around the world.
The US crude barrel rose 3.1% to $62.65, while the international standard Brent crude rose 2.8% to $64.56.
In overseas stock markets, Hong Kong’s Hangsen fell 0.6% following harsh words thrown between the US and China. The weekend report also said that China’s factory activities were contracted in May, although it fell from April.
In addition, the index was immersed in many other Asian and European countries. Japan’s Nikkei 225 was one of the biggest movers after a 1.3% drop.
In the bond market, the Treasury rose as concerns continued about how much debt the US government would accumulate as it plans to cut taxes and increase the deficit.
The 2010 Treasury yield rose to 4.43% from 4.41% in the second half of Friday, up from just 4.01% about two months ago. That’s a prominent move for the bond market.
In addition to making the money more expensive for US households and businesses to borrow, an increase in Treasury yield could prevent investors from paying higher prices for stocks and other investments.
AP writers Jiang Junzhe and Matt Ott contributed.
Original issue: June 2, 2025 9:53am EDT
