Wall Street wrapped up a volatile week and a standout month with a quiet finish on Friday, as the S&P 500 closed essentially flat—down just 0.01% at 5,911.69. The Nasdaq slipped 0.32%, while the Dow edged up by 54 points.
Despite the muted session, May marked a strong rebound for US equities. The S&P 500 added 6.2%, its best monthly performance since November 2023. The Nasdaq surged nearly 10% as tech stocks roared back, and the Dow rose almost 4%. Much of the rally followed a US-UK trade deal early in the month.
Tariff turmoil returns to centre stage
That optimism took a hit late in the week as President Donald Trump accused China of breaching a preliminary trade agreement, reigniting concerns about trade instability. His administration is now reportedly considering broader restrictions on Chinese technology imports.
Markets also digested a legal twist. A federal court ruled against Trump’s broad tariff regime midweek, only for an appeals court to temporarily pause that decision, keeping the duties in place for now. The White House is weighing a fallback strategy using the Trade Act of 1974 to impose temporary tariffs of up to 15%.
Steel showdown: Pittsburgh speech sets tone
The bigger shake-up came from Trump’s Friday appearance in Pennsylvania, where he unveiled a sweeping tariff hike—doubling levies on steel and aluminium imports from 25% to 50%, effective June 4. He framed the move as critical to US manufacturing and national security, tying it to a revised deal between US Steel and Japan’s Nippon Steel.
The revised agreement would see US Steel retain a US-based CEO and board, with new investment pledges of US$14bn, including US$2.2bn earmarked for the Mon Valley plant.
Global backlash and looming retaliation
The tariff hike drew swift condemnation from allies. The EU, UK, Canada, and Australia all raised objections, warning of retaliatory measures and trade distortions. The European Commission confirmed that paused countermeasures could be reinstated by mid-July unless a resolution is reached.
Looking ahead
The Bank of Canada is likely to maintain its current interest rates on Wednesday, with market pricing indicating a 22% chance of a rate cut, and the European Central Bank is anticipated to cut its key deposit rate by 0.25 percentage points to 2% on Thursday.
Commodities and the dollar
Brent crude is trading 0.9% lower at US$62.78 a barrel on the back of OPEC+’s decision on Saturday to lift output in July.
WTI crude is trading 0.25% lower at US$60.79 a barrel.
Spot gold is trading 0.86% lower at US$3,289.25 an ounce.
Gold futures (COMEX) are trading 0.85% lower at US$3,315.40 an ounce.
One Australian dollar is buying 64.35 US cents.
Futures
The SPI futures are pointing to an 8 point rise.
