US stock futures edged lower on Tuesday, extending a pattern of market fluctuations driven by persistent uncertainty over global trade relations.
S&P 500 futures slipped 0.5%, indicating continued volatility following recent daily swings between gains and losses. Futures for the Nasdaq 100 and Dow Jones Industrial Average also declined by 0.5% and 0.3%, respectively. European stocks followed suit, with the Stoxx Europe 600 index down 0.3%.
The moves come amid a complex backdrop of geopolitical and economic crosscurrents. Nearly two months after President Donald Trump’s broad tariff announcements and renewed efforts to reshape global trade relationships, negotiations with major US trading partners—China and the European Union—remain stalled. Despite White House attempts to arrange a call between Trump and Chinese President Xi Jinping, no reciprocal interest has yet emerged from Beijing.
Massimiliano Bondurri, CEO of SGMC Capital, told Bloomberg TV that market fluctuations are to be expected in such an environment.
“We’re clearly seeing a lot of volatility, and investors want more visibility,” he said.
Further weighing on sentiment are concerns over the trajectory of the US economy, which has shown signs of softening across sectors. The Organization for Economic Cooperation and Development (OECD) revised its global growth forecast down to 2.9% for this year and next—compared to a previous 3.1% outlook. The US is expected to see its growth rate decline sharply to 1.6% in 2025 from 3.3% in 2024.
Adding to the uncertainty, the Trump administration continues to promote its sweeping tax bill, though some investors worry that it could aggravate the federal deficit and rising debt levels.
In Asia, markets offered a mixed picture. The MSCI Asia Pacific Index rose 0.2%, with China’s mainland markets climbing on optimism over easing trade conflict, despite disappointing manufacturing data. The Caixin manufacturing PMI fell to 48.3 in May—the lowest since September 2022—indicating contraction. However, companies surveyed expressed optimism that tensions with the US might ease soon. South Korean markets remained closed for a presidential election.
Currency markets showed minor movements. The dollar held steady, with the Bloomberg Dollar Spot Index little changed. The euro dipped 0.1% to $1.1429, while the British pound also fell slightly. The Japanese yen remained stable against the dollar.
In the bond market, US Treasuries gained slightly. The yield on the 10-year note declined two basis points to 4.42%, while Germany’s equivalent fell three basis points to 2.50%. In the UK, the 10-year gilt yield dropped five basis points to 4.61%.
Commodities presented a mixed picture. Brent crude oil rose 0.3% to $64.82 per barrel, bolstered by renewed geopolitical tension. Gold fell 0.7% to $3,357.20 per ounce, pulling back after Monday’s rally.
Investors are now turning their attention to the eurozone, where fresh inflation data is due. Analysts expect consumer price growth to slow to 2.0% annually, down from April’s 2.2%. The European Central Bank is widely expected to announce a 25 basis point rate cut on Thursday, with markets pricing in the likelihood of additional cuts later in the year.
Despite intermittent signs of progress in global trade negotiations, the broader sentiment remains cautious. As Richard Koo, chief economist at Nomura Research Institute, observed, markets are likely to remain volatile until clearer signals emerge from policymakers on both sides of the Pacific.
Bloomberg, Market Watch, and the Wall Street Journal contributed to this report.
