Following its strongest month since 2023, Wall Street was set to start the week on a down note on Monday. The conflict between Russia and Ukraine intensified over the weekend, leading to increased market uncertainty and a spike in oil prices.
The S&P 500 futures dropped by 0.4% ahead of Monday’s opening, while the Dow Jones Industrial Average futures declined by 0.3%. Nasdaq futures fell by 0.6%.
In addition to the escalating tensions in the Russia-Ukraine war, oil prices and the shares of oil companies rose after OPEC+ opted for a production increase that was more conservative than expected.
Devon Energy saw a gain of 2.5%, while Chevron, Exxon, and ConocoPhillips all experienced increases of between 1% and 1.5%.
US benchmark crude oil increased by $2.54 (over 4%, reaching $63.33 per barrel), while the international standard Brent crude rose by $2.34 to $65.12 per barrel.
The steel industry gained even more attention. President Donald Trump announced on Friday to a Pennsylvania steel worker that he would double tariffs on steel imports, a significant hike that could inflate the prices of metals used in housing, automobiles, and other goods by as much as 50% to safeguard the industry.
Later, in a post on his Truth Social platform, Trump reiterated the increase in steel prices and stated that aluminum tariffs would also be doubled to 50%. He indicated that both tariff increases would take effect on Wednesday.
Both Nucor and Steel Dynamics saw their shares climb by approximately 10%, while Cleveland-Cliffs surged by an impressive 25%. U.S. steel stocks have surged this year amidst growing indications that Trump would endorse some form of sizable collaboration between U.S. steel companies and Japanese firms.
On Friday, Trump addressed potential partnerships at the Ilbin factory located in suburban Pittsburgh. Japan has invested in the renowned American steel manufacturer.
In a relatively quiet week for corporate earnings, Dollar Tree and general reports for the dollar are expected in the coming days.
Additionally, on Monday, the UnitedHealth Group conducted its annual meeting, following news of the CEO’s resignation for personal reasons. With shares having fallen 40% this year, the largest health insurer in the country has also suspended its full-year financial forecast due to unexpectedly high health costs.
In Asia, Hong Kong’s Hang Seng index initially dropped over 2% as tensions between Beijing and Washington escalated regarding trade.
China has countered U.S. actions by issuing export control guidelines for AI chips, planning to halt the sale of chip design software to China, and canceling Chinese student visas.
U.S. chipmakers experienced a notable decline early on Monday.
A report over the weekend indicated that factory activities in China have slowed since April, highlighting a deal reached with the U.S. that addressed the high tariffs imposed during Trump’s presidency, affecting market confidence.
However, the Hang Seng index closed only 0.6% lower at 23,157.97, with mainland Chinese markets closed for holidays.
Hong Kong’s Hang Seng ended 0.6% down at 23,157.97 as both China and the U.S. accused each other of violating their tariff agreement established last month in Geneva.
Tokyo’s Nikkei 225 sank 1.3% to 37,470.67, while Seoul’s Kospi gained 0.1% to reach 2,698.97.
Australia’s S&P/ASX 200 dipped 0.2% to 8,414.10. Meanwhile, India’s Sensex declined by 0.4%, and Taiwan’s Taiex fell by 1.6%.
In Europe, by noon, Germany’s DAX was down by 0.3%, while Paris’ CAC 40 and the UK’s FTSE 100 dipped by 0.5%.
In currency markets, the U.S. dollar fell from 143.87 yen to 142.72 yen on Monday morning. The euro edged up from $1.1351 to a high of $1.1418.
Source: apnews.com