Premarket: Global shares slide as Russia-Ukraine conflict, OPEC+ output plan push oil prices higher

Globe and Mail

2 days ago

Global shares sank on Monday and oil prices jumped as trade tensions and the Russian-Ukraine conflict ratcheted up geopolitical uncertainty.
The future for the S&P 500 lost 0.5% while that for the Dow Jones Industrial Average gave up 0.4%.
Germany's DAX retreated 0.4% to 23,891.11 and the CAC 40 in Paris declined 0.5% to 7,712.40.
British FTSE 100 gained 1% to 8,778.84.
In Asia, Hong Kong's Hang Seng initially plunged more than 2% as Beijing and Washington traded harsh words over trade. U.S. President Donald Trump's announcement that he will double tariffs on steel and aluminum to 50% layered on still more worries for investors.
But the Hang Seng closed just 0.6% lower, at 23,157.97. Markets in mainland China were closed for a holiday.
China blasted the U.S. for issuing AI chip export control guidelines, stopping the sale of chip design software to China, and planning to revoke Chinese student visas.
A report over the weekend that China's factory activity contracted in May, although the decline slowed from April as the country reached a deal with the U.S. to slash President Donald Trump's sky-high tariffs, further undermined market sentiment.
Oil prices rallied after OPEC+ decided on a modest increase in output beginning in July. It was the third monthly increase in a row.
U.S. benchmark crude oil gained $2.08 to $62.87 per barrel, while Brent crude, the international standard, was up $1.75 at $64.53 per barrel.
Moscow pounded Ukraine with missiles and drones just hours before a new round of direct peace talks in Istanbul and a Ukrainian drone attack destroyed more than 40 Russian planes deep in Russia's territory, Ukraine's Security Service said on Sunday.
Hong Kong's Hang Seng dropped 0.6% to 23,157.97 as China and the U.S. accused each other of breaching their tariff agreement reached in Geneva last month.
Tokyo's Nikkei 225 lost 1.3% to 37,470.67, while the Kospi in Seoul added 0.1% to 2,698.97.
Australia's S&P/ASX 200 retreated 0.2% to 8,414.10.
India's Sensex lost 0.4% while the Taiex in Taiwan fell 1.6%.
On Friday, Wall Street closed its best month since 2023. The S&P 500 retreated less than 0.1% and the Dow Jones Industrial Average edged 0.1% higher. The Nasdaq composite fell 0.3%.
Hopes had largely been rising that the worst of such worries had passed, which in turn sent stocks rallying, after Trump paused his tariffs on both China and the European Union. A U.S. court then on Wednesday blocked many of Trump's sweeping tariffs. That all sent the S&P 500 in May to its first winning month in four and its best since November.
But the tariffs remain in place while the White House appeals the ruling by the U.S. Court of International Trade, and the ultimate outcome is still uncertain.
In the bond market, Treasury yields eased after a report showed that the measure of inflation that the Federal Reserve likes to use was slightly lower in April than economists expected.
A separate report from the University of Michigan said that sentiment among U.S. consumers was better in May than economists expected. Sentiment improved in the back half of the month after Trump paused many of his tariffs on China.
In currency trading early Monday, the U.S. dollar fell to 142.91 Japanese yen from 143.87 yen. The euro inched up to $1.1421 from $1.1351.
The Associated Press