MARKET WRAPS
European stocks mostly fell on Monday as investor’s hopes for lasting resolution to the trade tensions soured.
However the FTSE rose as U.K. defense stocks gained ahead of the release of a defense review in the country.
Shares in steel and car companies fell in early trade after Trump said he was doubling the tariff on U.S. imports of steel and aluminum.
Meanwhile, the ECB is set to lower its key interest rate Thursday, a cut that investors expect to be among the last in this sequence unless the eurozone economy is threatened by recession.
Overseas, China pushed back against Trump’s accusation that it broke a trade truce reached just weeks earlier, as a re-escalation of tensions dimmed hopes of a resolution.
The Chinese Commerce Ministry said it is the U.S. side that has seriously undermined the consensus reached in Geneva.
Stocks to Watch
Galp’s Mopane discovery in Namibia has the potential to nearly double its share price over the next five years, UBS said as it upgraded the stock to buy from neutral and set a target price of 20 euros a share.
U.S. Markets:
Futures ticked lower after Trump tariffs threats and tensions with China escalated.
Meanwhile, n ew trade barriers were likely to push up prices in the short term , Federal Reserve governor Christopher Waller said.
Jobs data for May will be the focus of the week ahead.
Forex:
The dollar fell as trade concerns heated up.
“In the long term, it will become increasingly clear that the U.S. administration has no intention of abandoning tariffs,” Commerzbank said.
Nomura said the dollar was likely to weaken further as fading U.S. exceptionalism is ongoing and is expected to persist through the second half.
Any comments by the ECB President on the euro in the context of its future reserve currency status will be watched closely at Thursday’s meeting, MUFG said.
“We may hear more on that which would give the market the signal of the ECB welcoming euro appreciation as a means for supporting better domestic demand growth,” it said.
Bonds:
Treasury yields were little changed as concerns grow over U.S debt after Treasury Secretary Scott Bessent rejected the prospect of the U.S. ever defaulting.
“The fact that the question is even being asked seems place a few asterisks around that answer,” Rabobank said.
The skew for G-10 policy rates leaned very dovish through 2026, and this skew suggested that the likely direction of G-10 rates was much lower, Morgan Stanley said.
Treasurys were significantly outperforming Bunds, Gilts and Japanese government bonds as the Fed cuts rates much more than forwards price in 2026, it said.
The 10-year Bund yield could fall to 2.40% by 4Q 2025 and 2.20% by 4Q 2026, Morgan Stanley said.
This expectation is built on the anticipation of more interest-rate cuts by the ECB than forwards in 2025 and more interest-rate cuts by the Fed than forwards in 2026.
Energy:
Oil prices rose on flaring geopolitical tensions, shrugging off a largely expected OPEC+ agreement to hike production in July .
The market’s kneejerk reaction to the hike in fact appears positive on relief the number matches earlier guidance rather than exceeds it, Swissquote Bank said.
Metals:
Gold futures rose on heightened geopolitical and macroeconomic risk that increases the precious metal’s safe-haven appeal.
Gold gained as China pushed back on Trump’s accusation last week that it broke a temporary trade agreement.
Meanwhile, geopolitical tensions were also ratcheted up over the weekend, as Ukraine launched drone attacks deep inside Russia.
EMEA HEADLINES
Poland Elects Conservative With Ties to Trump as President
WARSAW-A conservative historian who had flaunted his ties with President Trump won Poland’s presidential election Sunday in a close, high-pressure race that drew the largest turnout since the country shook off Communism in 1989.
Karol Nawrocki, 42, who is supported by the conservative Law and Justice Party, won 50.89% of the vote. Warsaw Mayor Rafal Trzaskowski received 49.11%.
Sanofi to Acquire Blueprint Medicines for Up to $9.5 Billion
Sanofi agreed to buy Blueprint Medicines, a U.S. pharmaceutical company that specializes in rare immunological diseases, for up to $9.5 billion in a deal that seeks to strengthen the French drugmaker’s immunology portfolio.
The deal includes a drug for systemic mastocytosis, a rare immunology disease, approved in the U.S. and the European Union under the brand names Ayvakit and Ayvakyt as well as an early-stage immunology pipeline, the companies said Monday.
Novartis’s Cancer Treatment Pluvicto Shows Positive Results in Trial
Novartis said Pluvicto demonstrated positive results in patients with PSMA-positive metastatic hormone-sensitive prostate cancer.
The Swiss pharmaceutical company on Monday said Pluvicto showed statistically significant and clinically meaningful benefits-including combined with hormone therapy versus hormone therapy alone-with positive trend in overall survival.
Dior Names Jonathan Anderson Creative Director of Women’s, Men’s Collections
French fashion brand Dior named Jonathan Anderson as creative head of its women’s, men’s, and haute couture collections, unifying its creative direction under one designer for the first time since founder Christian Dior held the reins.
The haute couture brand, part of luxury conglomerate LVMH, in April appointed Anderson as artistic director of its men’s collections. The business said Monday that Anderson will also assume the creative direction of women’s collections.
GLOBAL NEWS
Asian Manufacturing Activity Stumbles Again Under Weight of Trump Tariffs
Factory activity slowed across much of Asia in May as uncertainty over U.S. tariffs continued to cause steep declines in new orders, purchasing managers surveys show.
The latest set of S&P Global purchasing managers indexes showed another pullback in manufacturing last month amid trade policy worries and subdued demand.
Why the U.S. Economy Will Muddle Through Trump’s Tariffs. Probably.
Economic data is finally coming in better than expected-but under the surface a puzzle remains, and how it works out matters hugely to investors.
“Soft” survey data is still weakening, and we’re getting good surprises only because expectations have plummeted. Meanwhile, the hard data on spending has been fine.
Flamethrower Attack in Boulder Leaves Eight Injured, Suspect in Custody
Eight people were injured Sunday in downtown Boulder, Colo., in an incendiary attack the FBI is investigating as an act of terror against a group advocating for the release of hostages in Gaza.
The incident occurred around 1:30 p.m. local time near the courthouse in a pedestrian area crowded with people, Boulder Police Chief Stephen Redfearn said.
The Law Firms That Appeased Trump-and Angered Their Clients
At a recent luncheon at Cipriani in Midtown Manhattan, a top lawyer for Citadel delivered a message to leaders of some of the country’s biggest law firms. Brooke Cucinella told them that the hedge-fund company likes to work with law firms that aren’t afraid of a fight.
Cucinella, head of litigation and regulatory inquiries at the business headed by Republican megadonor Ken Griffin, made no mention of politics. But some of the lawyers in attendance took her remarks as reference to a controversy that has been roiling the legal industry.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
06-02-25 0531ET
