U.S. stocks showed mixed performance on Monday, slipping slightly after disappointing data on the manufacturing sector, which has been a central focus of President Donald Trump’s trade policies and tariff strategies.
As of early afternoon, the S&P 500 dipped 0.1%, the Dow Jones Industrial Average dropped 218 points (0.5%), while the Nasdaq Composite rose 0.2%. The market’s decline followed a report from the Institute for Supply Management (ISM), which revealed that manufacturing activity in the U.S. shrank more than expected last month.
The data adds to concerns surrounding Trump’s ongoing trade war, which he has argued is aimed at revitalizing American manufacturing. However, the inconsistent implementation of tariffs has created considerable uncertainty for businesses. One transportation equipment company cited in the ISM survey noted the chaos caused by unpredictable trade policy, which has made it difficult for suppliers to remain profitable. Another respondent in the computer and electronics sector pointed to government spending delays and tariffs as major deterrents, with businesses unwilling to take inventory risks.
While a separate manufacturing report from S&P Global came in above expectations, underlying issues remained. According to Chris Williamson, chief business economist at S&P Global Market Intelligence, supplier delays and rising prices are among the challenges driven by tariff-related uncertainty.
Markets were also reacting to renewed tensions between the U.S. and China. Just weeks after agreeing to pause several tariffs, both sides returned to confrontational rhetoric. On Monday, China criticized the U.S. for measures it claimed were damaging to Chinese interests—such as export restrictions on AI chips and software, as well as proposed visa revocations for Chinese students. These actions, China argued, violated agreements reached in trade talks held in Geneva.
President Trump, for his part, recently accused China of failing to honor commitments from the pause in tariffs. Optimism around potential trade deals had been a key driver in last month’s Wall Street rally, which brought the S&P 500 within 3.8% of its record high after falling 20% in April.
But Trump further escalated matters on Friday by announcing a steep hike in tariffs on imported steel and aluminum—doubling both to 50%. He made the announcement during a speech to steelworkers in Pennsylvania and confirmed the move later on social media, saying the increases would take effect Wednesday. While shares of domestic steelmakers surged—Nucor climbed 8.3% and Steel Dynamics jumped 9.3%—industries that rely heavily on metals saw losses. General Motors and Ford fell 4.6% and 4.4%, respectively.
Elsewhere, Lyra Therapeutics saw its shares skyrocket by over 400% after announcing favorable late-stage trial results for a sinus implant designed to treat chronic inflammation.
Oil prices also made headlines, rising roughly 4% despite news that OPEC+ nations plan to boost output. Typically, more supply pushes prices down, but the hike had already been anticipated by investors. In addition, recent attacks by Ukraine on Russian targets raised fresh concerns about global energy supplies. U.S. crude rose to $63.19 per barrel, while Brent crude reached $65.15.
Globally, markets mirrored Wall Street’s unease. Hong Kong’s Hang Seng dropped 0.6% following the sharp rhetoric between Washington and Beijing. A report indicating a contraction in Chinese factory activity in May—though at a slower pace than April—added to the gloom. Japan’s Nikkei 225 posted one of the larger declines, falling 1.3%.
In the bond market, Treasury yields climbed as investors grew wary of rising federal debt amid plans for tax cuts and growing deficits. The 10-year Treasury yield rose to 4.46%, up from 4.41% Friday and significantly higher than the 4.01% seen two months ago. Rising yields tend to raise borrowing costs and can make stocks less attractive by comparison, putting additional pressure on equity markets.