China blasted the United States on Monday for moves that it said hurt Chinaโs interests, including issuing AI chip export control guidelines, stopping the sale of chip design software to China and planning to revoke Chinese student visas.
โThese practices seriously violate the consensusโ reached during trade discussions in Geneva last month, the Commerce Ministry said in a statement. That followed President Donald Trumpโs accusation at the end of last week, where he said China was not living up to its end of the agreement that paused their tariffs against each other.
Hopes for lower tariffs because of trade deals that Trump could reach with other countries were the main reasons for a big rally on Wall Street last month, which brought the S&P 500 back within 3.8 per cent of its all-time high. The index had dropped roughly 20 per cent below the mark in April.
But Trump on Friday told Pennsylvania steelworkers heโs doubling the tariff on steel imports to 50 per cent to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods.
Later in a post on his Truth Social platform, Trump confirmed the steel tariff and said that aluminum tariffs would also be doubled to 50 per cent. Both tariff hikes would go into effect Wednesday, Trump said.
That helped stocks of US steelmakers climb. Nucor jumped 8.4 per cent, and Steel Dynamics rallied 9.5 per cent.
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But automakers and other heavy users of metals weakened. General Motors reversed by 4.7 per cent, and Ford fell 4.6 per cent.
Lyra Therapeutics soared 410.3 per cent after reporting positive late-stage trial results of an implant to treat chronic sinus inflammation in some patients.
Some of Mondayโs strongest action was in the oil market, where the price of crude climbed roughly 3 per cent. The countries in the OPEC+ alliance decided to increase their production again, a move that often pushes crude prices down because it puts more on the market, but analysts said investors were widely expecting it. The past weekendโs attacks by Ukraine in Russia also helped to raise uncertainty about the flow of oil and gas around the world.
A barrel of US crude rose 3.4 per cent to $US62.87, while Brent crude, the international standard, gained 3.5 per cent to $US64.98.
In stock markets abroad, Hong Kongโs Hang Seng fell 0.6 per cent following the harsh words tossed between the United States and China. A report over the weekend also said that Chinaโs factory activity contracted in May, although the decline slowed from April.
Indexes also dipped across much of the rest of Asia and Europe. Japanโs Nikkei 225 was one of the biggest movers after falling 1.3 per cent.
In the bond market, Treasury yields rose as worries continue about how much debt the US government will pile on due to plans to cut taxes and increase the deficit.
The yield on the 10-year Treasury rose to 4.47 per cent from 4.41 per cent late Friday and from just 4.01 per cent roughly two months ago. Thatโs a notable move for the bond market.
Besides making it more expensive for US households and businesses to borrow money, such increases in Treasury yields can deter investors from paying high prices for stocks and other investments.
AP
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