A week that might have been mostly about Fedspeak, incoming economic data and Jobs Friday seems to be developing into a reprise of early April's day-to-day tariff-and-trade-war drama – without the extreme volatility.
Earnings season – highlighted by another blockbuster report from Nvidia (NVDA) on the trajectory of the AI revolution – is mostly over, so investors, traders and speculators will look elsewhere for information.
And, late last week, President Donald Trump returned to center stage with accusations against China that it violated recent agreements on tariffs and trade. Europe is now threatening its own response.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Beijing, of course, has answered the White House.
China has denied violating a trade truce with the U.S., The Wall Street Journal reported Monday, after President Trump accused it of violating the agreement. Trump also said he wanted to meet with President Xi Jinping.
Beijing, responding, says Washington has undermined the agreement with the introduction of "discriminatory and restrictive measures" such as issuing export-control guidelines for AI chips and revoking visas for Chinese students.
Nvidia faded late and was No. 4 among Dow Jones stocks Monday, with a gain of 1.7%, as technology was No. 2 among 10 of the 11 S&P 500 sectors in positive territory.
The Cboe Volatility Index (VIX) opened at 19.81 and got as high as 20.45 vs a previous close of 18.57 but settled down to 18.56. The fear index remains within its "normal" range of 12 to 20.
By the closing bell, the blue chip Dow Jones Industrial Average was up 0.1% to 42,305, the broader S&P 500 had risen 0.4% to 5,935, and the tech-heavy Nasdaq Composite was up 0.7% to 19,242.
Steel stocks show strength
Cleveland-Cliffs (CLF) was the biggest winner with a 23.7% gain but Nucor (NUE) and Steel Dynamics (STLD) surged too, rising 10.2% and 10.3%, respectively, after President Trump announced late Friday that he will raise tariffs on imported steel to 50% from 25%.
U.S. Steel (X), which will be acquired by Nippon Steel for $55 per share in a deal President Trump helped negotiate, was down 0.6%.
Trump made his announcement at U.S. Steel's Pittsburgh, Pennsylvania, headquarters and promised it would remain there.
"We're here today to celebrate a blockbuster agreement that will ensure this storied American company stays an American company," Trump said.
UBS analyst Andrew Jones notes that U.S. domestic steel producers are operating at approximately 78% utilization rates due to a current weak environment, with demand down 1% year over year following an 8% decline in 2024.
U.S. steel producers have capacity to increase production, Jones notes, and "sustained 50% tariffs opens the door for the reintroduction of previously unprofitable idled capacity and new capacity to enter the market in the medium to long term."
Incoming data shows weakness
The Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index (PMI) slipped to 48.5 in May from 48.7 in April, below a consensus forecast of 49.5. It's the third consecutive month the ISM manufacturing PMI has declined.
"The May ISM showed tariff pressure is beginning to bite for manufacturers who are seeing slowing activity, longer lead times and declining inventories," write Wells Fargo economists Shannon Grein and Tim Quinlan. "International demand is also drying up, with manufacturers reporting the lowest level of import orders since 2009."
Meanwhile, the Census Bureau said construction spending was down 0.4% in April vs March, the third straight monthly decline as high interest rates and the specter of tariffs continue to hinder all kinds of spending activity.
Investors, traders and speculators have an economic calendar packed with Federal Reserve officials this week in the lead-in to Jobs Friday.
Indeed, Fed Chair Jerome Powell delivered opening remarks at a Fed conference commemorating the 75th anniversary of the International Finance division, while Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee also spoke Monday.
"Although the venue may not provide a natural backdrop for discussing the outlook," observes Deutsche Bank economist Brett Ryan in a preview of the Fed chair's appearance, "market participants will nonetheless look to Powell's comments for guidance on the Fed's latest signals."
Ryan notes "no obvious signs of a meaningful deterioration," with jobless claims "up only marginally" compared to April and "well within their range" of the trailing 12 months.
"Assuming average hourly earnings and hours worked are in line with our projections," the economist concludes, "implied nominal compensation growth would be up 4.8% on an annual basis – still supportive of consumer spending."
The next Fed meeting is scheduled for June 17-18.
Related content
- AI vs the Stock Market: How Did Tech Stocks, Palantir and Albemarle Perform in May?
- 5 Best Fidelity ETFs to Buy Now
- Chime IPO: Should You Buy CHYM Stock?
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around
It's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
