Shaky start to June for stocks as fresh trade woes follow bumper May gains

By THIS IS MONEY

Updated: 16:10 BST, 2 June 2025

Global stock markets kickstarted June on the back foot as fresh geopolitical and trade uncertainty prompted investor caution after strong gains in May.

Ukrainian attacks on Russian military targets sparked fears of further escalation over the weekend, while US President Donald Trump’s latest threats to double steel import tariffs also weighed.

The FTSE 100 was down 0.4 per cent by mid afternoon, despite a boost from defence stocks. However, it outperformed European markets which traded roughly 0.5 per cent lower.

Britain’s blue chip index was also lifted by a more than 4 per cent jump in oil prices after OPEC+ countries agreed to boost production again.

US President Donald Trump has threatened to double steel import tariffs

Susannah Streeter, head of money and markets, Hargreaves Lansdown: said:  ‘Investors are getting used to aggressive statements being rolled back, but there’s no guarantee that the US President won’t follow through with more onerous restrictions, given he’s stayed steadfast to his pledge to bring more manufacturing back to the US.

‘It’s a big setback for steel manufacturers around the world, with orders set to be disrupted yet again. 

‘There had been high hopes that in the UK some stability would return following the US-UK trade deal but those have now been dashed.’

On Wall Street, the Nasdaq, S&P 500 and Dow Jones each opened 0.3 to 0.8 per cent lower, marking a disappointing start to June after their best month since 2023.

The tech-focused Nasdaq added 10 per cent in May as global stock markets broadly rallied and the FTSE 100 rose around 3.8 per cent, trailing Germany’s DAX which hit a record high after gaining 6 per cent for the month.

Matt Basi, managing director of London Capital Group, said: ‘We’ve been surprised by the relative calm in stock markets at the start of the week given the escalation in Ukraine/Russian tensions over the weekend and subsequent sharp reactions in commodity markets.

‘The sense is that equity traders are building immunity to geo-political news, instead developing a narrow focus on the direction of travel for interest rates.

‘What this means for the longevity of any relief really in the event of successful peace talks, remains to be seen.’

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Shaky start to June for stocks as fresh trade woes follow bumper May gains

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