Stock markets are under pressure again as global investors digest rising trade tension, inflation data, and mixed signals from key economies. Wall Street, the European market, and Asian markets all reacted cautiously. While some indexes saw modest gains, U.S. futures turned red as investors braced for a volatile week. Here’s what you need to know.

Stock Markets Slip as Wall Street Eyes Trade Risks

The week started with hope, but it didn’t last long. Futures tied to the DOW, S&P 500, and Nasdaq 100 fell around 0.4% on Tuesday morning. Markets were shaken by renewed trade tension, especially between the U.S. and China. President Trump’s threat to double tariffs on steel and aluminum spooked investors. China quickly pushed back, saying the U.S. violated a temporary trade agreement.

Wall Street had ended Monday on a positive note, with the S&P 500 rising 0.41% and the DOW adding just over 35 points. But now traders are watching closely. They’re waiting for new jobs data and signals from ongoing trade talks. Until then, uncertainty rules.

Stock Markets in Europe Watch Inflation and Trade Talks

Over in Europe, investors are bracing for key inflation numbers. The European Central Bank is widely expected to cut rates soon, and this week’s flash data could confirm that move. Inflation is forecast to cool closer to 2%, giving the ECB room to act. In April, eurozone inflation stayed at 2.2%, missing hopes for a decline.

Meanwhile, trade tensions are rising here too. The EU slammed Trump’s tariff plan, warning it could hurt negotiations. Still, European stock markets looked upbeat at the open. The FTSE, DAX, CAC 40, and Italy’s MIB all showed small gains. But that optimism may fade fast if trade talks break down further.

Stock Markets Mixed Across Asian Markets Amid Trade Worries

Asian markets sent mixed signals overnight. China’s factory activity dropped sharply in May, marking the worst slump since 2022. The Caixin PMI fell to 48.3, well below the 50 threshold that marks growth. U.S. tariffs are hitting Chinese exports hard, and trade talks aren’t going well either. China has accused Washington of breaking its promises.

Despite the bad news, not all Asian markets fell. Hong Kong’s Hang Seng rose over 1%, and Australia’s ASX 200 also gained. But Japan’s Topix slipped slightly, and India’s Sensex edged lower. South Korea’s markets were closed. Overall, traders in the region remain cautious, waiting to see how trade disputes evolve.

Wall Street Braces for Jobs Data and More Volatility

Wall Street has more than just trade to worry about. A wave of employment data is on the way. The JOLTS report, ADP employment numbers, and Friday’s non-farm payrolls could shake markets. These will show how the labor market is holding up under the weight of tariffs and inflation.

Earnings season is winding down, but key reports from companies like CrowdStrike, Hewlett Packard Enterprise, and Nio are still to come. Investors are also watching durable goods and factory orders for more economic clues. With so much in play, traders are preparing for more swings. As one strategist put it, this could be one of the most active six-week periods of the year.

Inflation, Trade, and Uncertainty Keep Stock Markets on Edge

With trade talks stalling and inflation data due, the mood in global stock markets is tense. Investors are juggling too many variables—tariffs, central bank decisions, weak manufacturing data, and fragile labor markets. While some indexes are still climbing, it’s clear that volatility is here to stay.

The DOW, S&P 500, and other benchmarks may recover—but only if policymakers find common ground. Until then, the mix of inflation pressure and trade tension will keep Wall Street, the European market, and Asian markets on high alert.