U.S. stock futures slid on Monday, pressured by mounting trade tensions between Washington and Beijing, just as hopes for a Federal Reserve interest rate cut later this year remained in play. Meanwhile, crude oil prices and Bitcoin both made strong moves upward, providing contrasting signals in the broader financial landscape.
U.S.-China Friction Reignites Fears of Trade Disruption
The fragile calm between the U.S. and China was shattered as Beijing hit back at recent trade accusations from President Donald Trump. The Chinese Ministry of Commerce labeled Trump’s claims – alleging that China broke the terms of the May Geneva trade accord – as “unfounded,” promising firm countermeasures in response.
According to Beijing, the U.S. has imposed several restrictive policies despite the agreement, including limits on AI chip exports, visa revocations for Chinese students, and prohibitions on chip design software sales.
This exchange follows a breakdown in dialogue reported late last week by U.S. Treasury Secretary Scott Bessent, who confirmed that trade discussions with China had stalled.
Wall Street Futures Slide to Start the Week
U.S. equity futures started the week lower as investors reacted to renewed geopolitical and economic uncertainty. As of 04:15 ET:
- S&P 500 futures dropped 0.6% (down 35 points)
- Nasdaq 100 futures slipped 0.7% (down 150 points)
- Dow Jones futures fell 0.5% (down 225 points)
This cautious tone comes after a strong finish to May: the S&P 500 posted over 6% monthly gains, the Nasdaq jumped 9%, and the Dow advanced roughly 4%.
However, with global trade stability now in doubt, attention turns to how fresh tariffs could weigh on growth. Investors are closely eyeing Friday’s U.S. nonfarm payrolls report, forecast to show 130,000 new jobs created—down from 177,000 in April.
Fed’s Waller: Rate Cuts Still Possible in 2024
Speaking at an event in South Korea, Fed Governor Christopher Waller signaled that interest rate cuts remain a viable option for later this year, citing progress on inflation and a still-resilient labor market.
Waller said inflationary pressures from Trump’s tariffs are unlikely to last, and if core inflation continues to ease toward the 2% target while job numbers hold steady, the central bank could justify a reduction in rates.
His remarks followed data showing some cooling in April’s PCE inflation report—the Fed’s preferred gauge of price growth.
Bitcoin Rebounds After Weekend Selloff
Bitcoin prices bounced back Monday, recovering from recent weakness tied to the escalating U.S.-China dispute. At 04:15 ET, the cryptocurrency was trading up 1.1% at $105,530, still below its late-May peak above $111,000.
The digital asset had declined amid signs of large-scale institutional outflows at the end of May. Nonetheless, it finished the month with an impressive 11% gain, driven by optimism around improved regulatory clarity in the U.S. and anticipation of de-escalation in global trade.
Piper Sandler analysts, fresh from the 2025 Bitcoin Conference in Las Vegas, reported growing confidence in the sector, citing increasing support from lawmakers, rising corporate adoption, and innovation in crypto-related financial products.
Oil Surges Despite Output Hike from OPEC+
Crude oil prices rallied sharply, even as OPEC+ confirmed it would raise output in July by 411,000 barrels per day – the third straight month of such an increase. The market took relief from the fact that the boost wasn’t larger than expected.
At 04:15 ET:
- Brent crude was up 3% at $64.66
- WTI crude gained 3.4% to $62.88
The rise followed last week’s dip of more than 1% and was further fueled by heightened geopolitical tensions, including fresh U.S. sanctions on Russia’s energy sector and renewed fighting in Ukraine. The pressure on key buyers like China and India added to bullish sentiment in the oil markets.