Market Report for Monday, June 2, 2025
Stocks centimetered higher Monday, undeterred by feeble factory data, a fresh outbreak of metals-based mischief—the last frontier of tariffs not yet tossed by the courts—and the usual pantomime between Washington and Beijing. When the bell rang, investors gave the day a reluctant nod.
Level Change 6/2/25 (%)
– – – – – – – – – – – – – – –
+0.1 Dow
+0.7 Nasdaq
+0.7 Nasdaq 100
+0.4 S&P 500
-0.2 S&P 400
-0.4 S&P 600
The S&P extended last week’s gains, which capped May as the market’s best month since 1997—awkward news for anyone who sold in May and went away, only to watch the market go up and stay. Another Wall Street adage that rhymes better than it performs.
Today’s modest climb came despite fresh frictions in the Trump-Xi trade series.
On Friday, President Trump signed off a post with “So much for being Mr. Nice Guy,” which, if the aim was coaxing China back to the table, might not have been the suavest opening line. China replied with its usual chill, reminding all concerned that it doesn’t do diplomacy under duress, and a note that talks conducted under threat are rarely talks at all. They’re usually theater.
Even so, a Trump-Xi call is reportedly in the works this week, because every on-again, off-again saga needs a reunion scene, and markets remain hopeless romantics, no matter how many times they’ve been jilted.
Back in America’s steel country, Trump staged a campaign-style event to unveil a doubling of steel and aluminum tariffs. A banner touting the golden age tested better than “A Pricey Future for Washing Machines.” The steel lobby cheered. So did swing-state strategists, who still call tariffs a wedge issue.
Less thrilled were the industries that actually use steel, and the nations that sell it to America—many of whom thought they had handshake deals that now look more like verbal IOUs shouted over jet noise.
The so-called TACO trade—Trump always chickens out—may be nearing its expiration date.
Halfway through the 90-day tariff pause, progress is scarce and a court ruling just tossed most of Trump’s tariffs into the legal trash heap. Trump has to show he’s more than just talk. With steel and aluminum tariffs among the few still standing, he promptly doubled them, flanked by flags, hardhats, and applause. Leverage, it turns out, is a perishable good.
But you don’t hear much applause on factory floors.
Manufacturing missed again in May, with the ISM index slipping to 48.5, its weakest since November. New orders stayed negative for a fourth month, imports fell to levels not seen since 2009, and high prices refused to budge. If this is reshoring, it’s having a rough onboarding.
Fed Governor Waller tried to soothe nerves, repeating his line that tariffs will have a “transitory” impact on inflation—provided they stay low and inflation keeps falling, which strikes your correspondent as a highly specific scenario. Nonetheless, he expects that outcome, and rate cuts later this year. And maybe a nomination to Fed chair.
In corporate news, Google (GOOG -1.4%) dipped after reports that Samsung may ditch Gemini for Perplexity, the AI search startup with actual footnotes. If true, Google’s AI crown may be headed for the same fate as Siri: quietly replaced and never mentioned again. Worse, if Perplexity becomes the default search on Galaxy phones, it could dent Google’s core business. Almost no one knows how to change a default setting. Just ask the people whose microwaves have been flashing 12:00 since the Clinton administration.
And that was enough for light green. Wall Street’s betting that no more “Mr. Nice Guy” just means “see you Thursday.”
— Jason Kelly
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