Wall Street drifts higher as oil prices jump and US manufacturing slumps
[June 03, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stock indexes drifted closer to their records on
Monday, coming off their stellar May, which was Wall Street’s best month
since 2023.
The S&P 500 rose 0.4% after erasing an early loss from the morning. The
Dow Jones Industrial Average added 35 points, or 0.1%, and the Nasdaq
composite climbed 0.7%.
Indexes had been down close to 1% in the morning following some
discouraging updates on U.S. manufacturing. President Donald Trump has
been warning that U.S. businesses and households could feel some pain as
he tries to use tariffs to bring more manufacturing jobs back to the
country, and their on-and-off rollout has created lots of uncertainty.
But stocks rallied back as the day progressed, and gains for a few
influential stocks helped lift the S&P 500 even though more stocks
within it fell than rose. Nvidia climbed 1.7%, and Meta Platforms rose
3.6%, for example.
Some of Monday’s strongest action was in the oil market, where the price
of crude spurted more than 3%. The countries in the OPEC+ alliance
decided to increase their production again, a move that often pushes
crude prices down because it puts more on the market, but analysts said
investors were widely expecting it.
The past weekend’s attacks by Ukraine in Russia, meanwhile, helped to
raise uncertainty about the flow of oil and gas around the world.
Monday’s market moves also came after more harsh rhetoric crossed
between the world’s two largest economies, just a few weeks after the
United States and China had agreed to pause many of their tariffs that
had threatened to drag the economy into a recession.
China blasted the United States for moves that it said hurt China’s
interests, including issuing AI chip export control guidelines, stopping
the sale of chip design software to China and planning to revoke Chinese
student visas.
“These practices seriously violate the consensus” reached during trade
discussions in Geneva last month, the Commerce Ministry said in a
statement. That followed President Donald Trump’s accusation at the end
of last week, where he said China was not living up to its end of the
agreement that paused their tariffs against each other.
Hopes for lower tariffs because of potential trade deals between Trump
and other countries were the main reasons for Wall Street’s big rally
last month, which brought the S&P 500 back within 3.8% of its all-time
high. The index had dropped roughly 20% below the mark in April.
But Trump on Friday told Pennsylvania steelworkers he’s doubling the
tariff on steel imports to 50% to protect their industry, a dramatic
increase that could further push up prices for a metal used to make
housing, autos and other goods. That helped stocks of U.S. steelmakers
climb. Nucor jumped 10.1%, and Steel Dynamics rallied 10.3%.
On the losing side of Wall Street were automakers and other heavy users
of steel and aluminum. Ford fell 3.9%, and General Motors reversed by
3.9%.
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Traders William Lawrence, left, and Mark Mueller work on the floor
of the New York Stock Exchange, Thursday, May 29, 2025. (AP
Photo/Richard Drew)
All told, the S&P 500 rose 24.25 points to 5,935.94. The Dow Jones
Industrial Average added 35.41 to 42,305.48, and the Nasdaq composite
climbed 128.85 to 19,242.61.
Lyra Therapeutics soared nearly 311% for one of the market’s biggest
gains after reporting positive late-stage trial results of an implant to
treat chronic sinus inflammation in some patients.
In the bond market, Treasury yields rose as worries continue about how
much debt the U.S. government will pile on due to plans to cut taxes and
increase the deficit.
The yield on the 10-year Treasury climbed to 4.44% from 4.41% late
Friday and from just 4.01% roughly two months ago. That’s a notable move
for the bond market.
Besides making it more expensive for U.S. households and businesses to
borrow money, such increases in Treasury yields can deter investors from
paying high prices for stocks and other investments.
Yields had dipped briefly in the morning, before rallying back,
following the updates on manufacturing, which suggested that effects of
Trump’s tariffs are taking root in the economy.
“The impact of ever-changing trade policies of the current
administration has wreaked havoc on suppliers’ ability to react and
remain profitable,” one manufacturer in the transportation equipment
industry said in the Institute for Supply Management’s survey, which
came in weaker than economists expected.
A separate report from S&P Global on manufacturing came in better than
expected, but the overall figure “masks worrying developments under the
hood of the U.S. manufacturing economy,” said Chris Williamson, chief
business economist at S&P Global Market Intelligence. He said
uncertainty caused by tariffs has worries high about supplier delays and
rising prices.
In stock markets abroad, Hong Kong’s Hang Seng fell 0.6% following the
harsh words tossed between the United States and China. A report over
the weekend also said that China’s factory activity contracted in May,
although the decline slowed from April.
Indexes also dipped across much of the rest of Asia and Europe. Japan’s
Nikkei 225 was one of the biggest movers after falling 1.3%.
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AP Writers Jiang Junzhe and Matt Ott contributed.
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