FedSpeak, the week that may have been on Friday, mainly about the economic data and jobs that are coming in, appears to be developing without the extreme volatility of the daily tariff and trade drama of early April.
The revenue season – highlighted by another blockbuster report from Nvidia (NVDA) on the trajectory of the AI ​​revolution – is almost over, so investors, traders and speculators look elsewhere for information.
And later last week, President Donald Trump returned to the Chinese stage with accusations of violating recent tariff and trade agreements. Europe is now threatening its own response.
Subscribe to Kiplinger’s personal finances
Be smarter, better informed investors.
Save up to 74%
Sign up for Kiplinger’s free e-newsletter
Remember profits and prosperity with expert advice on investments, taxes, retirements, personal finances and more – directly to email.
Profit and prosperity with the advice of the best experts – directly to your email.
Of course, Beijing answered the White House.
China has refused to violate a trade ceasefire with the United States, the Wall Street Journal reported Monday after accusing President Trump of violating the agreement. Trump also said he wanted to meet President Xi Jinping.
Responding to this, Beijing said that Washington has undermined the introduction and agreement of “discriminatory and restrictive measures” such as issuing export control guidelines for AI chips and canceling visas for Chinese students.
Nvidia was fourth in Dow Jones stock on Monday, earning 1.7%, and technology ranked second out of 10 out of 11 S&P 500 sectors in the positive territory.
The CBOE Volatility Index (VIX) opened at 19.81 and reached 20.45 at the end of the previous 18.57, but settled at 18.56. The fear index remains within the “normal” range of 12-20.
Until the closing bell, the Blue Chip Dow Jones Industrial Arage rose 0.1% to 42,305, the wider S&P 500 rose 0.4% to 5,935, while the high-tech Nasdaq composite rose 0.7% to 19,242.
Steel stock indicates strength
Cleveland Cliffs (CLF) was the biggest winner with a gain of 23.7%, but Nuclear (NUE) and Iron Dynamics (STLD) also rose sharply, up 10.2% and 10.3%, respectively.
US Steel (X), which is acquired by Nippon Steel at $55 per share in a deal that President Trump helped negotiate, fell 0.6%.
Trump announced it in the US in Pittsburgh, Pennsylvania, and promised that it would remain there.
“We are here today to celebrate a blockbuster agreement that ensures that this storied American company will maintain its American company,” Trump said.
UBS analyst Andrew Jones said domestic US steel producers are operating at around 78% utilization due to the current weak environment, down 1% year-on-year following a 8% decline in 2024.
US steel producers have the ability to increase production, Jones said, “The 50% tariffs maintained open the door to reintroducing previously unemployed idol capabilities and new capabilities to enter the market in the medium term.”
Incoming data indicates weakness
The Institute for Supply Management (ISM) said the Manufacturing Purchase Manager Index (PMI) slipped to 48.5 to 48.5, below the consensus forecast of 48.7 to 49.5 in May. This is the third consecutive month that ISM manufacturing PMI has decreased.
“ISM in May showed that tariff pressures were beginning to bite manufacturers who were slowing down, long lead times and stocks saw declines,” wrote Wells Fargo economists Shannon Grain and Tim Kinlan. “International demand is also running out, and manufacturers are reporting the lowest level of import orders since 2009.”
Meanwhile, the Census Bureau said construction spending fell by 0.4% in April and March, and the third consecutive month of monthly declines as high interest rates and tariffs continue to hinder all kinds of spending activities.
Investors, traders and speculators have an economic calendar packed with Federal Reserve officials this week, led by Friday’s work.
In fact, Federal Reserve Chairman Jerome Powell gave his opening speech at the Fed Conference to mark the 75th anniversary of the international finance division, while Dallas Fed President Rory Logan and Chicago Free President Austan Ghoolsby also spoke on Monday.
“The venue may not provide a natural background to discuss the outlook,” Deutsche Bank Economist Brett Ryan said in a preview of the exterior of the Fed’s chair.
Ryan pointed out that “there is no obvious sign of meaningful degradation,” claiming that the unemployed was “slightly” and that “within the range” of 12 months compared to April.
“Using the average hourly wage and working hours are in line with the forecast, economists have concluded that the growth in implicit nominal compensation would increase by 4.8% per year.
The next Fed meeting is scheduled for June 17th-18th.
