By Katy Barnato and Sam Goldfarb
Trade tensions between the U.S. and China are flaring up again, weighing on world markets.
Global stocks fell after Beijing denied violating the recent trade truce struck with Washington, pushing back against President Trump's accusation from late last week.
Beijing said it was the U.S. that had "seriously undermined" the truce. It alleged Washington had introduced multiple "discriminatory and restrictive measures," such as export-control guidelines for AI chips and revoking visas for Chinese students.
On Sunday, Treasury Secretary Scott Bessent said he was confident Trump and Chinese leader Xi Jinping would soon talk and problems "will be ironed out."
Stocks across Asia and Europe saw modest losses Monday. Steel and car stocks got an extra knock after Trump said late last week he would double tariffs on steel and aluminum to 50%, effective Wednesday.
The European Union said the increase undermines its trade negotiations with the U.S. and could trigger retaliatory duties. "The EU is prepared to impose countermeasures," a spokesman said. The bloc has sent a trade team to Washington for more talks.
In recent trading:
The Dow industrials slipped to start off June, while the S&P 500 was slightly lower and the tech-heavy Nasdaq Composite bounced between small gains and losses. In May, U.S. stocks delivered their best month since 2023, powering through turbulent tariff news and an uneven earnings season.
Treasury yields edged higher. Treasury Secretary Bessent said Sunday that the budget deficit would gradually be reduced over the next few years as Trump looks to shore up support for his fiscal megabill.
The WSJ Dollar Index weakened. The euro, the pound and the yen all strengthened against the greenback.
U.S. crude oil futures rose more than 3% after Ukraine launched an audacious drone attack on Russian military airports. Separately, OPEC+ agreed to another large supply hike over the weekend, which will take effect July.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
June 02, 2025 14:28 ET (18:28 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
