Wall Street Drops as Oil Prices Surge, Trump Announces Tariff Hikes on Steel and Aluminum

 

📉 June 2, 2025 – Market Update

Wall Street began the week on a sour note following escalating geopolitical tensions and a spike in oil prices. After capping its strongest month since 2023, the stock market turned downward Monday morning as the Russia-Ukraine conflict intensified over the weekend and OPEC+ opted for a smaller-than-expected oil production increase.

Futures for the S&P 500 dropped 0.4%, the Dow slipped 0.3%, and the Nasdaq retreated 0.6% ahead of the opening bell.

Crude oil prices surged in response, with U.S. benchmark oil jumping more than 4% to $63.33 per barrel and Brent crude rising to $65.12. Energy stocks rallied on the news, with Devon Energy up 2.5%, and Chevron, ExxonMobil, and ConocoPhillips each climbing between 1% and 1.5%.

Adding further pressure, former President Donald Trump made headlines on Friday by announcing a dramatic increase in tariffs. Speaking to steelworkers in Pennsylvania, Trump pledged to double tariffs on steel and aluminum imports to 50%, citing the need to protect domestic industry. The tariff hike will take effect this Wednesday.

Steel stocks soared in response: U.S. Steel has already seen substantial gains this year, while Nucor and Steel Dynamics jumped about 10%. Cleveland-Cliffs surged an eye-popping 25%. Trump also hinted at a potential investment deal between U.S. Steel and Japan’s Nippon Steel, further energizing the sector.

Meanwhile, Asian markets reflected global anxieties. Hong Kong’s Hang Seng dropped 0.6% after an early 2% plunge as U.S.-China tensions flared. Beijing condemned Washington’s new AI chip export restrictions and visa crackdowns. Chinese factory data also revealed continued contraction in May.

Tokyo’s Nikkei 225 fell 1.3%, Taiwan’s Taiex lost 1.6%, and India’s Sensex slipped 0.4%. However, South Korea’s Kospi edged up 0.1%.

In Europe, midday trading showed the German DAX down 0.3%, France’s CAC 40 sliding 0.5%, while Britain’s FTSE 100 bucked the trend, inching up 0.1%.

Back in the U.S., UnitedHealth Group began its annual meeting with investor uncertainty high following its CEO’s recent resignation and suspension of financial forecasts. Shares have tumbled 40% this year.

As investors digest trade headlines, war developments, and economic data, volatility is expected to persist throughout the week.