Stock Market Update

The stock market is on course for a lower start with futures on the S&P 500 trading 25 points below fair value.

The market is having to deal with some early pressure on sentiment after President Trump said on Friday that the tariff on steel imports into the U.S. will be doubled to 50% on Wednesday.

Overnight action saw some selling in global equities while sovereign debt has also headed lower with the U.S. 10-yr yield rising one basis point to 4.43% while the 30-yr yield is up three basis points at 4.96%.

Investors received final May Manufacturing PMI readings from major economies with China's reading (49.5; prior 49.0) remaining in contraction for the second month in a row while the eurozone's reading (49.4; prior 49.0) also pointed to an ongoing contraction.

The U.S. session will also see the release of the final Manufacturing PMI for May (prior 50.2) at 9:45 ET, followed by April Construction Spending (Briefing.com consensus 0.1%: prior -0.5%) and May ISM Manufacturing (Briefing.com consensus 49.0%; prior 48.7%) at 10:00 ET.

In U.S. corporate news:

• Steel Dynamics (STLD 136.66, +13.59, +11.0%) and Nucor (NUE 120.66, +11.54, +10.6%): President Trump announced a doubling of the tariff on steel imports.
• Moderna (MRNA 27.49, +0.93, +3.5%): received FDA approval for new COVID shot.
• Campbell Soup (CPB 34.40, +0.36, +1.1%): beat Q3 expectations and reaffirmed its guidance for FY25.

Reviewing overnight developments:

• Asian markets ended lower. Japan's Nikkei -1.3%, Hong Kong's Hang Seng -0.6%, China's Shanghai Composite CLOSED.
  • In economic data:
    • China's May Manufacturing PMI 49.5, as expected (last 49.0) and Non-Manufacturing PMI 50.3 (expected 50.6; last 50.4)
    • Japan's Q1 Capital Spending 6.4% yr/yr (expected 3.8%; last -0.2%). May Manufacturing PMI 49.4 (expected 49.0; last 48.7)
    • Hong Kong's April Retail Sales -2.3% yr/yr (last -3.5%)
    • South Korea's May trade surplus $6.94 bln (expected surplus of $4.61 bln; last surplus of $4.88 bln). May Imports -5.3% yr/yr (expected -3.1%; last -2.7%) and Exports -1.3% yr/yr (expected -2.7%; last 3.7%). May Manufacturing PMI 47.7 (last 47.5)
    • India's May Manufacturing PMI 57.6 (expected 58.3; last 58.2)
    • Australia's May Manufacturing PMI 51.0 (expected 51.7; last 51.7). May ANZ Job Advertisements -1.2% m/m (last -0.3%) and May MI Inflation Gauge -0.4% m/m (last 0.6%). May Commodity Prices -7.7% yr/yr (last -7.1%)
  • In news:
    • Steelmakers faced pressure after President Trump shared a plan to double the tariff on steel imports to 50%, starting Wednesday.
    • The Wall Street Journal reported on Friday that the trade détente between the U.S. and China is being jeopardized by a disagreement over access to rare earth elements.
    • Japan's top trade negotiator said that an agreement was made with representatives from the U.S. to accelerate talks.
• Major European indices trade on a mostly lower note. Germany's DAX -0.4%, U.K.'s FTSE UNCH, France's CAC -0.5%.
  • In economic data:
    • Eurozone's May Manufacturing PMI 49.4 (expected 48.4; last 49.0)
    • Germany's May Manufacturing PMI 48.3 (expected 48.8; last 48.4)
    • U.K.'s May Nationwide HPI 0.5% m/m (expected 0.0%; last -0.6%); 3.5% yr/yr (expected 2.9%; last 3.4%). May Manufacturing PMI 46.4 (expected 45.1; last 45.4). April BoE Consumer Credit GBP1.58 bln (expected GBP1.10 bln; last GBP1.10 bln) and April Mortgage Lending -GBP760 mln (expected -GBP500 mln; prior GBP12.96 bln)
    • France's May Manufacturing PMI 49.8 (expected 49.5; last 48.7)
    • Italy's May Manufacturing PMI 49.2 (expected 49.5; last 49.3)
    • Spain's May Manufacturing PMI 50.5 (expected 48.3; last 48.1)
    • Swiss Q1 GDP 0.5% qtr/qtr (expected 0.4%; last 0.3%); 2.0% yr/yr (expected 1.5%; last 1.6%). April Retail Sales 1.3% yr/yr (expected 2.5%; last 2.1%). May Manufacturing PMI 42.1 (expected 48.1; last 45.8)
  • In news:
    • The European Central Bank is expected to announce a rate cut at the conclusion of its meeting on Thursday.