Stocks opened lower on Monday, June 2, as investors began the new month with renewed concerns amid ongoing trade tensions between the US and China.

Global stocks showed some downward activity as Asian and European markets closed lower, and American stocks fell. Regarding the major American indexes, the Dow Jones Industrial Average dropped by 160 points. Investor concerns also led to the S&P 500 pulling back by 0.4%, while the Nasdaq Composite opened down by 0.5%.

The resilient stock market ended May in bullish territory despite notable declines caused by tariffs that affected sentiment throughout the month.
The Dow rose by 4% in May, while the Nasdaq led the gains with a 9% increase for the month, driven by some huge earnings reports. Perhaps more notably, the S&P 500 had its best performance in May since 1990 and its best overall monthly performance since November 2023.
The tailwinds that pushed stocks up also became a catalyst for the rise in cryptocurrencies, with Bitcoin (BTC) soaring to its all-time high of over $111,000. However, like the broader risky asset market, the price of Bitcoin has decreased and is approaching $104,000.
Across the market, the US dollar fell slightly while gold rose, as a flight to safe-haven assets resumed.

Meanwhile, oil prices surged after news that OPEC+ plans to increase production by much less than the market expected. On Saturday, OPEC+, a coalition of global oil producers, announced an increase of 411,000 barrels of oil per day.

The latest pullback in stocks occurred as investors weigh the ongoing trade tensions between the US and China. Last week, US President Donald Trump spooked investors by threatening to raise tariffs on steel and aluminum imports from 25% to 50%. This followed Trump's statement that China had 'violated' a trade agreement recently reached in Geneva, Switzerland.
But China retaliated, noting that the US had not fulfilled its part of the deal.

This new escalation threatens to create negative market sentiment. Although this week the focus will be on Trump's tax bill amid a series of data releases, tariffs are likely to be a major factor to watch. Attention will also be directed to the geopolitical front following drone strikes by Ukraine against Russia.

Despite these factors, Tom Lee, co-founder and managing partner of Fundstrat, remains optimistic about the S&P 500.

Lee shared his forecast on CNBC's 'Squawk Box', noting that the index has a higher chance of reaching 6600 in the future than it did in February. The S&P 500 is currently hovering around 5911, compared to 4982 in early April. In February 2025, it reached around 6144.



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