US stocks dipped on Monday, shaking off the bullish mood from May, as fresh US-China trade tensions resurfaced. The Dow Jones Industrial Average (^DJI) dropped about 0.7%, or roughly 170 points. Meanwhile, the S&P 500 (^GSPC) slipped nearly 0.5%, and the tech-heavy Nasdaq Composite (^IXIC) edged down by around 0.3%. Investors are growing cautious as renewed trade worries cloud the market outlook at the start of June.

The main reason for the market’s pullback today was the spike in US-China trade tensions. China fired back at President Trump’s accusation that it broke the Geneva tariff truce, saying the US was the one not holding up its end of the bargain. This back-and-forth has cooled hopes for a quick restart in trade talks between the two economic giants. Just last Friday, Trump threatened to double US tariffs on imported steel and aluminum from 25% to 50%, adding pressure. Although a federal court recently struck down parts of Trump’s tariffs, a higher court reinstated them temporarily, keeping the legal battle—and market worries—alive. The US dollar (DX-Y.NYB) took a hit as investors weighed the risks of a trade war, with concerns about rising inflation and slowing growth grabbing attention. On the flip side, gold futures (GC=F) rose, as traders sought safer assets amid geopolitical and trade uncertainties. The recent drone strikes by Ukraine on Russia added a new layer of geopolitical tension, pushing demand for safe-haven investments like gold higher. Despite the rocky start to June, May was a bright spot for US stocks. The S&P 500 rallied over 6%, marking its best month since November 2023 and the strongest May in more than 30 years. However, the fresh flare-up in trade tensions has put a pause on that momentum as investors turn more cautious in the new month. Investors are now focused on a critical week of economic data, which could set the tone for the market in the near term. The May nonfarm payrolls report, due this Friday, will be especially important. It’s expected to offer insight into how trade tensions and interest rate expectations are shaping the US economy. Earlier in the week, updates on US factory activity from S&P Global and the Institute for Supply Management (ISM) were released, providing early clues on economic health.

Federal Reserve Governor Christopher Waller weighed in on Monday, saying any inflation caused by tariffs will likely be short-lived. He believes this temporary inflation means the Fed can afford to cut interest rates in 2025, calling it “good news.” Wall Street will be paying close attention to speeches from Fed Chair Jerome Powell and other officials later in the day for more clues on the Fed’s direction.

Earnings season is winding down, but a few big names are still making news this week. Investors are watching reports from CrowdStrike (CRWD), Broadcom (AVGO), DocuSign (DOCU), and Lululemon (LULU). These companies will offer some final insights into corporate performance amid ongoing economic uncertainties.


US-China trade tensions and tariff threats shook investor confidence, leading to declines in Dow, S&P 500, and Nasdaq.

How are key economic reports affecting the stock market today?
Important reports like May’s nonfarm payrolls and factory data guide investors on growth and inflation risks amid trade worries.