Midday Market Roundup for Monday, June 2, 2025

Good afternoon. Here are the top four global financial and economic topics shaping markets at midday, Monday, June 2, 2025:

1. Wall Street Wavers as Trade Tensions and Tariff Uncertainty Return

U.S. stock markets opened the week on a cautious note, with the S&P 500 down about 0.1% and the Dow Jones Industrial Average lower by nearly 200 points at midday. The Nasdaq managed a modest gain, buoyed by the resilience of tech companies. Investors are digesting renewed trade friction after China accused the U.S. of undermining the recent trade agreement. At the same time, President Trump announced plans to double tariffs on steel imports to 50% starting Wednesday. The move sent U.S. steelmaker stocks higher, but it also reignited concerns over global supply chains and inflation. Meanwhile, a federal court ruling that briefly blocked the tariffs was overturned by a higher court over the weekend, allowing the duties to proceed for now. Brent crude oil surged nearly 4% on news of OPEC+ supply, and gold jumped almost 2% as investors sought safe havens (Investopedia, Moneycontrol, Reuters).

2. Dollar Slides, Euro Strengthens Ahead of ECB Rate Decision

The U.S. dollar fell to a six-week low, pressured by renewed concerns over tariffs, global capital flows, and anxiety about U.S. fiscal policy. Despite these challenges, the euro gained ground, showcasing its resilience even as the European Central Bank is widely expected to cut its main interest rate by 25 basis points at Thursday’s meeting. The ECB’s anticipated move comes amid sluggish eurozone growth and easing inflation. The euro’s resilience is attributed to a reversal of capital flows from the U.S. and expectations for further ECB easing. Germany’s new Chancellor is set to visit Washington this week for key trade talks with President Trump as Europe and the U.S. seek to resolve ongoing disputes (Reuters, S&P Global).

3. U.S. Manufacturing Contracts Again; Imports Hit 15-Year Low

New data from the Institute for Supply Management revealed that U.S. manufacturing activity contracted for a second consecutive month in May, with import levels reaching their lowest point since 2009. This contraction, along with companies reducing shipments to the U.S. in response to tariffs, has led to a significant drop in imports, with April imports down about 20% from March and total imports hitting $276 billion. This has contributed to a slowdown in consumer spending growth, which cooled from 0.7% in March to 0.2% in April. Analysts note that while GDP may get a boost from trade in the second quarter, the longer-term impact of tariffs could weigh on growth and supply chain momentum (Moneycontrol, CFI).

4. Fed and Global Central Banks in Focus as Markets Eye Jobs Data

Federal Reserve Chair Jerome Powell is scheduled to speak this afternoon, with investors looking for clues on the path of interest rates. The Fed faces significant pressure from President Trump to cut rates, but policymakers remain cautious as they monitor inflation and the impact of tariffs. Last week, Fed Governor Christopher Waller suggested that rate cuts could be considered later this year if inflation remains subdued. This cautious approach in the face of mounting pressure underscores the gravity of the situation. Globally, all eyes are on the ECB’s Thursday rate decision and a busy week of economic data, including U.S. nonfarm payrolls and ISM PMI updates. The Bank of Canada also meets this week, while key data from Brazil, the eurozone, and Asia will shape global sentiment (Investopedia, S&P Global, Riotimes).

Sources:

• Investopedia: https://www.investopedia.com/5-things-to-know-before-the-stock-market-opens-june-02-2025-11746196
• S&P Global: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-2-june-2025.html
• Moneycontrol: https://www.moneycontrol.com/news/business/markets/wall-street-wavers-midday-as-trade-tensions-simmer-weak-factory-data-hits-sentiment-13088160.html
• CFI: https://cfi.trade/en/blog/economic/global-economic-outlook-economic-spotlight-2-7062025
• Reuters: https://www.reuters.com/business/finance/global-markets-view-usa-2025-06-02/
• Riotimes: https://www.riotimesonline.com/economic-calendar-key-market-events-for-the-week-from-june-2-to-june-6-2025/

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