United States
Equity markets rose modestly on Monday, with investors largely brushing off renewed trade tensions. The S&P 500 added 24 points, or 0.41%, to close at 5,935 after recovering from early losses. The Nasdaq outperformed, gaining 128 points (0.67%) to reach 19,242, while the Dow Jones Industrial Average posted a marginal increase of 0.08%.
Gains were broad-based, with 10 of the 11 S&P 500 sectors finishing in positive territory. Industrials were the sole decliner. Energy led the way as oil prices rallied, followed closely by strength in the technology sector.
Trade concerns resurfaced over the weekend after U.S. President Trump accused China of breaching prior agreements. In response, Chinese officials rejected the claims as “groundless.” Despite tensions, optimism remained that dialogue between the two nations’ leaders—expected later this week—could help ease uncertainty. After the close, U.S. Customs and Border Protection announced a temporary pause on certain Chinese imports until August 31. Meanwhile, the European Union warned that the new U.S. tariffs on steel and aluminium could derail ongoing negotiations. The U.S. has requested final trade offers from its negotiating partners by Wednesday.
In corporate news, steelmakers surged following the tariff announcement. Steel Dynamics jumped 10.27%, while Nucor gained 10.10%. A more than 3% rise in oil prices lifted energy stocks—ExxonMobil rose 0.73%, and Halliburton advanced 2.14%.
Technology stocks were mixed. Meta Platforms rose 3.62% to USD 670.90 after The Wall Street Journal reported the company plans to fully automate its advertising platform using AI by year-end. The news weighed on traditional advertising names.
On the economic front, the ISM Manufacturing PMI declined again in May, marking a third consecutive monthly drop. Supplier delivery times lengthened, hinting at possible disruptions in supply chains linked to tariff uncertainty.
Bond markets saw yields rise across the curve, with rates climbing 4 basis points from the 2-year to the 30-year tenor. The 10-year U.S. Treasury yield closed at 4.44%. The U.S. dollar resumed its downward trend falling 0.60% on the Bloomberg Dollar Index.
Europe
European equity markets were subdued on Monday as investors remained cautious in response to escalating global trade tensions. The Euro Stoxx 600 slipped 0.14% to close at 547.92. Sector performance was mixed, with five sectors finishing higher and six lower. Energy stocks once again led the gains, while technology was the worst-performing sector.
In the UK, the FTSE 100 ended the session virtually flat at 8,744.
Automakers came under pressure, with Stellantis falling 4.96%, as traders reacted negatively to rising trade barriers. In contrast, defence stocks were broadly higher following the release of a new Strategic Defence Review in the UK. Prime Minister Rishi Sunak committed to increased defence spending, with additional funding directed toward nuclear-powered submarines, drones, and military data systems.
Commodity-related stocks also gained. Rising oil, copper, and gold prices lifted resource companies, with both Shell and BP climbing over 1%. Copper miner Antofagasta advanced 1.95%.
On the economic front, Eurozone manufacturing PMIs improved in May, with the index rising to 49.4. While still below the expansion threshold of 50, the result indicates a stabilising trend. Investors are now turning their attention to the European Central Bank’s meeting on Thursday, where a 25 basis point rate cut is widely anticipated.
Bond yields in both the UK and Germany edged up by 2 basis points. In currency markets, the euro strengthened against the U.S. dollar, rising 0.83% to 1.1441, driven by broad-based U.S. dollar weakness.
Australia
The Australian share market began the new month on a softer note, slipping 0.24% to close at 8,414, a 20-point decline. Market sentiment was dampened by the announcement of higher U.S. tariffs on steel and aluminium, alongside rising geopolitical tensions, prompting investors to trade cautiously. Eight of the eleven sectors finished in the red, led by losses in energy, materials, and utilities.
Weaker-than-expected manufacturing PMI data from China over the weekend intensified concerns about global growth. This weighed on iron ore prices and, in turn, the major mining stocks. BHP declined 1.23% to $37.78, while Rio Tinto fell 1.70% to $110.75. Energy stocks mirrored this weakness despite a rally in oil prices during the Asian session. Oil rose more than 2.5% following smaller-than-anticipated OPEC+ supply increases and heightened tensions involving Iran. Nonetheless, Woodside dropped 1.12% to $22.00 and Yancoal slid 1.15% to $5.17.
Gold prices rose on the back of risk-off sentiment, boosting gold miners. Evolution Mining gained 3.05%, and Newmont added 1.20%. BlueScope Steel jumped 4.40% following the U.S. tariff hike on imported steel, BlueScope has large manufacturing capabilities inside the US, while Alcoa declined 4.78% on the same news.
In corporate news, a major merger was announced between long-time cross-shareholders Brickworks and Soul Pattinson, creating a $14 billion entity. Brickworks shares surged 27.59% to $35.10, while Soul Pattinson rose 16.44% to $43.00.
Financial stocks were generally weaker. Macquarie fell 0.98% and Westpac declined 1.17%. However, the broader financial sector avoided steeper losses thanks to strength in health insurers, with both NIB and Medibank gaining more than 2%.
In the bond market, yields were steady, with the 10-year yield inching up by 1 basis point to 4.26%. Investors now turn their attention to the release of the Reserve Bank of Australia’s meeting minutes today, which could provide further insight into the central bank’s outlook on rates and the economy. The Australian dollar will begin the session higher, trading at 0.6492 against the U.S. dollar, a gain of 0.95% over the past 24 hours.
The stronger commodity prices has seen ASX200 futures rally overnight adding 66 points a gain of 0.78%.
Commodities
Gold prices surged at the start of the month, reaching a three-week high before settling at USD 3,381—up USD 92 or 2.80%. The sharp rise was driven by renewed geopolitical tensions, with reports of Ukrainian strikes on military targets deep within Russia and escalating global trade disputes prompting a wave of safe-haven buying.
Silver followed suit, jumping USD 1.78 or 5.39% to close at USD 34.76—its highest level since October 2023.
In contrast, Bitcoin remained largely unchanged, closing at USD 104,932 as investors favoured traditional safe-haven assets.
Iron ore edged lower, with July futures in Singapore slipping USD 0.50 (-0.52%) to USD 94.95. Meanwhile, copper prices rose on both the London Metal Exchange (LME) and the Comex. LME copper gained USD 118 or 1.2% to close at USD 9,616 per tonne, while Comex futures jumped 3.91%, as widening U.S. tariffs created a larger pricing gap between the two markets.
Oil prices also moved higher following OPEC+’s announcement of a modest supply increase for July. West Texas Intermediate (WTI) rose USD 1.73 (2.85%) to USD 62.52, while Brent crude gained 3.65%. The group’s decision to raise output by 411,000 barrels per day was smaller than markets had feared. Additional upward pressure came from rising tensions in U.S.–Iran nuclear discussions, Ukrainian attacks over the weekend, and widespread wildfires in Canada. The fires have disrupted approximately 7% of oil sands production, raising concerns about near-term supply shortages.
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
