Stock futures fell early Monday after China pushed back against U.S. accusations that it had violated the Geneva trade agreement, instead blaming Washington for failing to uphold the deal — a sign that negotiations between the world’s two largest economies are deteriorating.
Tensions have reignited following a brief pause after U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in Geneva and agreed to a 90-day suspension of most tariffs.
S&P 500 futures
traded down 0.53%, and Nasdaq-100 futures
were 0.68% lower. Futures
tied to the Dow Jones Industrial Average also declined 174 points, or 0.41%.
National Economic Council director Kevin Hassett suggested on Sunday that President Donald Trump and China’s President Xi Jinping could have a conversation about trade as soon as this week.
On Friday, the S&P 500
closed out the month of May with a more than 6% gain, its best monthly performance since November 2023. The tech-heavy Nasdaq Composite
surged more than 9% for the month and the Dow Jones Industrial Average
rose about 4%.
That said, Morgan Stanley’s Chris Toomey is skeptical about whether May’s market momentum will continue.
“We’re probably still range-bound,” the managing director told CNBC’s “Closing Bell” on Friday. “The concern we’ve got is that while I think we’ve taken [out] the worst-case scenario with regards to the ‘liberation day’ [tariffs], we’re in a situation where I think the market’s right now probably pricing in the best-case scenario.”
He added: “Everyone’s talking about the fact that there’s probably going to be 10% tariffs across the board, 30% for China. I think that’s kind of baked in.”
President Donald Trump’s tariffs have been in legal limbo following two key court rulings last week. The U.S. Court of International Trade struck down much of the president’s steep levies Wednesday, ordering his administration to stop collecting them. A day later, however, a federal appeals court granted the administration’s request to temporarily pause that ruling, effectively reinstating the duties.
Trump’s top economic advisors have remained optimistic in the tariffs even with the recent legal challenge, as Commerce Secretary Howard Lutnick said on Fox News over the weekend that the tariffs are “not going away.” Additionally, National Economic Council’s Hassett told ABC News that he’s “very confident that the judges will uphold this law.”
Hassett also suggested that Trump and China’s President Xi Jinping could discuss trade as early as this week, though he said no date for the talks has been set. His comments come as trade tensions between the U.S. and China ramped up last week, with Trump writing in a Truth Social post Friday that China has “TOTALLY VIOLATED ITS AGREEMENT WITH US.”
Trump also told U.S. steelworkers late Friday that he will double tariffs on steel imports to 50%, effective from Wednesday.
Meanwhile, investors will be eyeing a slew of reports due this week that could provide insight into how tariffs have affected the U.S. economy, including the key May nonfarm payrolls reading on Friday.
