Stocks Plummet as Trade Tensions Flare Up Again

Markets Kick Off June with a Bang

Stocks crashed through the floor on Monday, June 2, as investors kicked off the new month with a serious case of the jitters. The ongoing drama between the United States and China is shaking things up once again.

Global Markets Feel the Heat

It's been a wild ride worldwide, with Asian and European markets taking a hit and U.S. stocks sliding down the slope. The Dow Jones Industrial Average took a 160-point nosedive. The S&P 500 wasn't far behind, dropping 0.4%, while the Nasdaq Composite opened 0.5% in the red.

May's Bullish Run Despite Tariff Tantrums

Despite the rollercoaster ride with tariffs causing some serious stomach drops, the stock market ended May on a high note. The Dow edged up 4%, but the Nasdaq stole the show with a whopping 9% gain, fueled by some blockbuster earnings. The S&P 500? It had its best May since 1990 and its best month overall since November 2023.

Crypto and Commodities Ride the Wave

The same forces that propelled stocks to new heights also gave cryptocurrencies a boost. Bitcoin (BTC) soared to an all-time high above $111k, but like everything else, it's now feeling the heat, hovering near $104k. Meanwhile, the U.S. dollar took a slight dip, and gold surged as investors scrambled for safe havens.

Oil Prices Surge Amid OPEC+ Surprise

Oil prices shot up after OPEC+ announced a much smaller output hike than the market expected. On Saturday, this group of global oil producers said they'd increase output by just 411,000 barrels a day.

Trade Tensions Escalate Once More

The latest stock market plunge comes as investors grapple with the ongoing U.S.-China trade tensions. Last week, President Donald Trump sent shockwaves through the market by threatening to double tariffs on steel and aluminum imports from 25% to 50%. He claimed China had "violated" the trade deal they just signed in Geneva. But China isn't taking it lying down, saying the U.S. hasn't held up its end of the bargain.

What's Next for the Market?

This fresh escalation could throw some serious shade on the market. While Trump's tax bill is in the spotlight this week, along with a slew of data releases, keep an eye on tariffs. And don't forget the geopolitical scene—Ukraine's drone strikes against Russia are adding to the tension.

Bullish Outlook Amid the Chaos

Despite all this, Tom Lee from Fundstrat is still betting big on the S&P 500. He told CNBC's 'Squawk Box' that he sees the index hitting 6,600 sooner than we think. Right now, the S&P 500 is hovering around 5,911, up from 4,982 in early April. It peaked at around 6,144 in February 2025.