Stocks, Bonds, Dollar Fall As Trade Risks Flare Up: Markets Wrap

Wall Street kicked off the week on the back foot, with stocks, bonds and the dollar falling amid renewed trade tensions and geopolitical uncertainties. Oil rallied.

Coming off the best May for the S&P 500 in 35 years, the benchmark edged lower at the start of what’s historically one of its quietest months for gains. Longer-term Treasuries led losses, with the spread between five- and 30-year yields near 100 basis points, a level it last closed above in 2021. The greenback dropped against most major currencies. Gold climbed on revived demand for safer assets.

The latest twists in Donald Trump’s tariff agenda have heightened market uncertainty, following mutual accusations between the Washington and Beijing of breaching a trade deal, and the US president’s pledge to double levies on all steel and aluminum imports. Meantime, Russia and Ukraine resumed peace talks in Istanbul a day after Kyiv staged one of its boldest aerial attacks.

“We continue to expect market volatility as investors digest fresh tariff headlines and incoming US economic data. Fiscal worries remain, and geopolitical tensions are heating up,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

Traders will next focus on US manufacturing data, forecast to show an improvement, but remain in contraction territory below 50. Federal Reserve Chair Jerome Powell is among policymakers scheduled to speak, with the week culminating in jobs data on Friday.

Corporate Highlights:

• Jamie Dimon said his retirement from the top post at JPMorgan Chase & Co. is “several years away,” but the decision is up the bank’s directors.
• Bristol-Myers Squibb Co. will pay BioNTech SE as much as $11.1 billion to license a next-generation cancer drug, as competition intensifies in an area of oncology that seeks to harness the immune system to attack tumors.
• Shares in US steel and aluminum stocks climbed as Trump said he would be increasing tariffs on steel and aluminum to 50% from 25%.
• General Electric Co. is exercising some cost increases to pass on additional charges caused by tariffs, as the world’s largest aircraft engine maker advocates for a return to a duty-free regime that long underpinned the industry.
• US-listed Macau casino operators climbed after data showed gaming revenue for May rose 5%, exceeding analyst estimates on an influx of tourists during China’s Golden Week holiday.
• Moderna Inc. gained US approval for a new Covid vaccine for a narrower group of people, in the latest sign that regulators are restricting access to immunizations under the leadership of Health and Human Services Secretary Robert F. Kennedy Jr.
• Sanofi agreed to buy Blueprint Medicines Corp. for at least $9.1 billion as the French drugmaker expands further in rare immunological diseases.

Key Events This Week:

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.3% as of 9:30 a.m. New York time
• The Nasdaq 100 fell 0.3%
• The Dow Jones Industrial Average fell 0.4%
• The Stoxx Europe 600 fell 0.3%
• The MSCI World Index fell 0.2%
• Bloomberg Magnificent 7 Total Return Index fell 0.5%
• The Russell 2000 Index was little changed

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.5% to $1.1408
• The British pound rose 0.5% to $1.3522
• The Japanese yen rose 0.7% to 143.01 per dollar

Cryptocurrencies

• Bitcoin fell 0.9% to $104,045.78
• Ether fell 1% to $2,501.53

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.43%
• Germany’s 10-year yield advanced three basis points to 2.53%
• Britain’s 10-year yield advanced one basis point to 4.66%

Commodities

• West Texas Intermediate crude rose 4.3% to $63.39 a barrel
• Spot gold rose 1.9% to $3,353.24 an ounce

Source