If Wall Street had a patron saint, she would surely be a goddess of contradiction. After a May filled with hope - buoyed by robust earnings, cooling inflation, and what seemed like a thaw in America's global trade posture - the first trading day of June greets investors with a grim shrug. Futures are down: the Dow by 0.4%, the S&P 500 by 0.5%, and the Nasdaq by 0.6%. President Donald Trump, it seems, has opened another chapter in his ongoing saga of fiscal whiplash - this time by doubling tariffs on imported steel and aluminum.

The new levies - 50% tariffs beginning Wednesday - were announced late Friday, with Trump's characteristic timing that ensures the markets have a full weekend to marinate in uncertainty. Ostensibly a response to China's alleged violation of a trade agreement, the announcement landed just hours after Trump accused Beijing of once again "not playing fair."

Late last week, the U.S. Court of International Trade blocked a subset of tariffs, prompting markets to surge. Then, in an abrupt reversal, a federal appeals court reinstated most of them, if only temporarily.

The malaise extended into the tech sector this morning. Mega-cap and growth stocks trended lower, with Tesla leading the retreat after dismal monthly sales in Portugal, Denmark, and Sweden. 

Later today, Federal Reserve Chair Jerome Powell will speak at the 75th anniversary of the Fed's International Finance Division. His comments are eagerly awaited, though few expect clarity. Already this morning, Fed Governor Christopher Waller hinted that rate cuts remain possible this year - even as the Trump tariffs threaten to nudge inflation higher. It's a tightrope walk between fiscal hawkishness and political reality.

Today's economic docket includes readings from the S&P Global U.S. manufacturing PMI and the ISM's manufacturing activity index. On Friday, the all-important nonfarm payrolls report will be released - a temperature check on the labor market that has remained surprisingly resilient, even as trade instability complicates hiring and investment decisions.

Looking back at May, the S&P 500, after a bruising first quarter under the shadow of Donald Trump's return to the White House, has finally managed a coherent rally - up 6.15% over the month, its best monthly performance since November 2023. Yet even this rebound, impressive on paper, comes with caveats: the index remains only barely positive for the year and still 3.8% below its February highs. Europe's STOXX 600, by contrast, continues its methodical climb - unfazed, for now, by American dysfunction.

And dysfunction is precisely the word. In Washington, the specter of fiscal chaos looms once again. The Senate is preparing to debate Trump's incendiary new tax bill - already passed in the House - under the gaze of a jittery financial sector. Treasury Secretary Scott Bessent attempted to calm nerves in a Sunday morning appearance, pledging that America “will never default.” His assurances, however, had the hollow ring of political theater. In a swipe at JPMorgan CEO Jamie Dimon, who warned of a bond market unraveling, Bessent said that none of Jamie's predictions have ever come true. Comforting? Perhaps not.

Beyond America's borders, volatility continues to simmer. Ukraine, emboldened by deep strikes inside Russian airspace, is entering fresh talks in Istanbul. In Poland, a nationalist insurgent, Karol Nawrocki, narrowly defeated the centrist establishment, signaling further rightward drift in Eastern Europe.

Meanwhile, the odds of a U.S. recession have dropped from 39% to 30% on prediction markets like Polymarket, buoyed by marginally stronger economic indicators. OPEC+, for its part, is attempting a delicate dance - raising output for the third straight month, nudging oil prices downward, and sending a soft signal to inflation-watchers.

The coming week offers a mixed macroeconomic bag. The European Central Bank is expected to cut rates by 25 basis points on Thursday, marking a pivotal policy shift. In the U.S., May's employment numbers drop on Friday. And while corporate earnings are mostly in hibernation, all eyes will turn to semiconductor behemoth Broadcom, reporting Thursday night. In a market starved for clarity, even one good chip story could prove cathartic.

As for today: markets in the Asia-Pacific region were bleeding red. Tokyo, Taipei, and Hong Kong all fell sharply overnight, as geopolitical tensions and trade uncertainty continue to poison the waters. European indices are similarly grim.

Today's economic highlights:

On today's agenda: Japan's PMIs, followed by those of France, Germany, the Eurozone, and the United Kingdom; In the United States with the PMIs, construction spending, and the ISM manufacturing index; In Switzerland, GDP and the manufacturing PMI will also be released. See the full calendar here.

  • Dollar index: 98,790
  • Gold: $3,360
  • Crude Oil (BRENT): $65.40 (WTI) 63.17
  • United States 10 years: 4.41%
  • BITCOIN: US$104,240

In corporate news:

  • EOG Resources will acquire US company Encino Acquisition Partners for $5.6 billion, including debt, to strengthen its position in the Utica shale.
  • Google will appeal the antitrust ruling on online search.
  • Rivian is considering renegotiating its debt, according to Bloomberg.
  • Hims will cut 4% of its workforce following the ban on copies of weight-loss drugs.
  • James Hardie secures $3.5 billion in senior credit facilities for AZEK acquisition.
  • The US rare earth metals industry faces economic disruption from supply chain issues and global competition.

Analyst Recommendations:

  • Charter Communications, Inc.: Bernstein downgrades to market perform from outperform with a price target raised from USD 385 to USD 410.
  • Church & Dwight Co., Inc.: RBC Capital upgrades to outperform from sector perform with a target price raised from USD 100 to USD 114.
  • Csx Corporation: Goldman Sachs downgrades to neutral from buy with a target price of USD 35.
  • Knight-Swift Transportation Holdings Inc.: Goldman Sachs upgrades to buy from neutral with a price target raised from USD 45 to USD 65.
  • Nike, Inc.: Baptista Research downgrades to hold from outperform with a price target reduced from USD 84.90 to USD 69.30.
  • Nucor Corporation: BMO Capital Markets upgrades to outperform from market perform and raises the target price from USD 140 to USD 145.
  • Old Dominion Freight Line, Inc.: Goldman Sachs upgrades to buy from neutral with a target price raised from USD 190 to USD 200. 
  • Rollins, Inc.: Jefferies upgrades to buy from hold with a price target raised from USD 55 to USD 65.
  • Applovin Corporation: Arete Research maintains its sell recommendation with a price target raised from 200 to USD 250.
  • Crowdstrike Holdings, Inc.: Wells Fargo maintains its overweight recommendation and raises the target price from USD 430 to USD 550.
  • Elastic N.v.: Citigroup maintains its buy recommendation with a price target reduced from USD 160 to USD 125.
  • Elf Beauty: Raymond James maintains its strong buy recommendation and raises the target price from USD 105 to USD 130.
  • Five Below, Inc.: Truist Securities maintains its hold recommendation with a price target raised from 81 to USD 112.
  • General Motors Company: HSBC maintains its hold recommendation with a price target raised from 39 to USD 48.
  • Marvell Technology Group Ltd: Fubon Securities maintains its buy recommendation and reduces the target price from USD 130 to USD 80.
  • Nvidia Corporation: CTBC Securities Investment Service Co LTD maintains its buy recommendation and raises the target price from USD 118.30 to USD 166.
  • Regeneron Pharmaceuticals, Inc.: Morgan Stanley maintains its overweight rating and reduces the target price from USD 958 to USD 755.
  • Snowflake Inc.: Redburn Atlantic maintains its sell recommendation and raises the target price from 115 to USD 150.
  • Tesla, Inc.: DBS Bank maintains its hold recommendation with a price target raised from 275 to USD 350.
  • United States Steel Corporation: BMO Capital Markets maintains its market perform recommendation and raises the target price from 45 to USD 55.