Dow Futures declined on Monday as tensions between China and the U.S. escalated again, raising the prospect of a potentially expensive trade conflict. Elsewhere, the possibility of an interest rate cut by the U.S. Federal Reserve this year remains on the table, as indicated by a Fed policy maker, while bitcoin experienced a rebound following weekend losses and crude prices surged in response to the latest OPEC+ meeting. The duration of the detente between the two largest economies globally has been brief. On Monday, China responded to U.S. President Donald Trump’s claims that Beijing had breached the consensus established during the Geneva trade discussions, labeling the accusations as “groundless” and vowing to implement robust measures to protect its interests.

The statement issued by the commerce ministry addressed Trump’s comments made on Friday regarding China’s alleged violation of a bilateral agreement concerning the reduction of tariffs. The ministry stated that China has executed and diligently maintained the agreement established last month in Geneva, whereas the U.S. has enacted several “discriminatory restrictive” measures against China. The measures encompassed the issuance of guidance regarding AI chip export controls, the suspension of sales of chip design software to China, and the revocation of visas for Chinese students, as stated by the ministry.

In mid-May, Beijing and Washington reached an agreement in Geneva to suspend triple-digit tariffs for a duration of 90 days. Furthermore, China has committed to removing trade countermeasures that have limited its exports of essential metals required for U.S. semiconductor, electronics, and defense manufacturing. Late last week, U.S. Treasury Secretary Scott Bessent indicated that trade discussions with Beijing had come to a standstill.

U.S. stock futures declined on Monday, initiating the week with a downturn as escalating trade tensions between the U.S. and China heightened apprehensions regarding a deceleration in global economic growth. The S&P 500 futures declined by 35 points, representing a decrease of 0.6%. Meanwhile, Nasdaq 100 futures experienced a drop of 150 points, or 0.7%, and Dow futures fell by 225 points, equating to a 0.5% decline. Wall Street is commencing the new week and month on a subdued note, relinquishing a portion of the previous month’s robust gains amid escalating tensions in the rhetoric between the U.S. and China.

On Friday, the broad-based S&P 500 concluded May with an impressive gain exceeding 6%, marking its strongest monthly performance since November 2023. The tech-heavy Nasdaq Composite experienced an increase exceeding 9%, while the blue chip Dow Jones Industrial Average saw a rise of approximately 4%. Concerns regarding the economic outlook may impede the performance of the primary stock indices this week. Consequently, investors are likely to concentrate on a series of reports scheduled for release that could shed light on the impact of tariffs on the U.S. economy, particularly the nonfarm payrolls data for May, which is set to be published on Friday. This report is anticipated to indicate that the economy generated 130,000 new jobs, a decrease from the unexpectedly high figure of 177,000 in April.

The conclusion of the week brings forth the highly scrutinized monthly U.S. jobs report, which is expected to offer crucial insights into the economic landscape as it faces another phase of trade volatility. This follows closely on the heels of the PCE price index data, which is the Federal Reserve’s favored measure of inflation, indicating a moderation in inflationary pressures during April.

According to Fed Governor Christopher Waller on Monday, the Federal Reserve retains the capacity to reduce interest rates this year, bolstered by recent data that aligns with this perspective. During a conference in South Korea, Waller indicated that an increase in inflation resulting from President Donald Trump’s trade tariffs is unlikely to be enduring, thereby providing the Fed with greater assurance to reduce rates later this year. If “underlying inflation continues to make progress to our 2% goal,” along with tariffs settling at lower rates and employment remaining “solid,” “I would be supporting good news rate cuts later this year,” Waller stated. The Fed governor highlighted the recent advancements in inflation as of April and observed that the labor market continues to exhibit strength. This situation provides the central bank with further latitude to assess the developments in trade negotiations prior to making decisions regarding interest rates.

Bitcoin, the world’s largest cryptocurrency, experienced an uptick on Monday, recovering from significant declines over the weekend as investor risk appetite was adversely affected by escalating trade tensions between the U.S. and China. Bitcoin stabilized at $105,530, reflecting a 1.1% increase, following a decline from its peak of over $111,000 reached in late May. Bitcoin experienced losses as data on exchange-traded fund flows indicated that institutional investors significantly reduced their positions during the final two trading days of May. The surge in Bitcoin’s value to unprecedented levels can be attributed not only to the positive sentiment surrounding a potential easing of trade tensions between the U.S. and China but also to advancements in the formulation of more favorable regulatory frameworks for cryptocurrencies in the United States. The cryptocurrency experienced an 11% increase in May.

Piper Sandler analysts expressed that their attendance at the 2025 Bitcoin Conference in Las Vegas left them “incrementally more optimistic on the momentum we’re seeing across Bitcoin and digital assets broadly.” The analysts noted the rising backing from U.S. policymakers, the escalating adoption by corporations, and the introduction of new financial products as indicators of a developing and broadening crypto ecosystem.

Oil prices experienced a significant uptick on Monday following OPEC+’s announcement of plans to maintain production increases in July at the same levels as the previous two months, providing a sense of relief amid discussions of a more substantial rise. Brent futures increased by 3% to $64.66 per barrel, while U.S. West Texas Intermediate crude futures advanced by 3.4% to $62.88 per barrel. Both benchmarks experienced a significant increase on Monday, following a decline of over 1% the previous week, as the Organization of the Petroleum Exporting Countries and their allies, referred to as OPEC+, announced on Saturday a decision to elevate output by 411,000 barrels per day in July. This marks the third consecutive month in which the leading producers have raised output by a consistent amount, coinciding with reports indicating their intention to deliberate on a more substantial production increase as they aim to reclaim market share. The escalation of military engagement between Russia and Ukraine, coupled with reports of additional U.S. sanctions targeting Russia’s oil sector—specifically aimed at significant purchasers like China and India—has contributed to a heightened sentiment in the crude market.