Wall Street drifts higher as oil prices jump and U.S. manufacturing slumps

Traders William Lawrence, left, and Mark Mueller work on the floor of the New York Stock Exchange, Thursday, May 29, 2025. (AP Photo/Richard Drew)

HONG KONG — U.S. stock indexes drifted closer to their records on Monday, coming off their stellar May, which was Wall Street’s best month since 2023.

The S&P 500 rose 0.4% after erasing an early loss from the morning. The Dow Jones Industrial Average added 35 points, or 0.1%, and the Nasdaq composite climbed 0.7%.

• S&P 500 market updates here

Indexes had been down close to 1% in the morning following some discouraging updates on U.S. manufacturing. U.S. President Donald Trump has been warning that U.S. businesses and households could feel some pain as he tries to use tariffs to bring more manufacturing jobs back to the country, and their on-and-off rollout has created lots of uncertainty.

But stocks rallied back as the day progressed, and gains for a few influential stocks helped lift the S&P 500 even though more stocks within it fell than rose. Nvidia climbed 1.7%, and Meta Platforms rose 3.6%, for example.

Some of Monday’s strongest action was in the oil market, where the price of crude spurted more than 3%. 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 weekend’s attacks by Ukraine in Russia, meanwhile, helped to raise uncertainty about the flow of oil and gas around the world.

Monday’s market moves also came after more harsh rhetoric crossed between the world’s two largest economies, just a few weeks after the United States and China had agreed to pause many of their tariffs that had threatened to drag the economy into a recession.

China blasted the United States for moves that it said hurt China’s interests, including issuing AI chip export control guidelines, stopping the sale of chip design software to China and planning to revoke Chinese student visas.

“These practices seriously violate the consensus” reached during trade discussions in Geneva last month, the Commerce Ministry said in a statement. That followed President Donald Trump’s 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 potential trade deals between Trump and other countries were the main reasons for Wall Street’s big rally last month, which brought the S&P 500 back within 3.8% of its all-time high. The index had dropped roughly 20% below the mark in April.

But Trump on Friday told Pennsylvania steelworkers he’s doubling the tariff on steel imports to 50% to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods. That helped stocks of U.S. steelmakers climb. Nucor jumped 10.1%, and Steel Dynamics rallied 10.3%.

On the losing side of Wall Street were automakers and other heavy users of steel and aluminum. Ford fell 3.9%, and General Motors reversed by 3.9%.

All told, the S&P 500 rose 24.25 points to 5,935.94. The Dow Jones Industrial Average added 35.41 to 42,305.48, and the Nasdaq composite climbed 128.85 to 19,242.61.

Lyra Therapeutics soared nearly 311% for one of the market’s biggest gains after reporting positive late-stage trial results of an implant to treat chronic sinus inflammation in some patients.

In the bond market, Treasury yields rose as worries continue about how much debt the U.S. government will pile on due to plans to cut taxes and increase the deficit.

The yield on the 10-year Treasury climbed to 4.44% from 4.41% late Friday and from just 4.01% roughly two months ago. That’s a notable move for the bond market.

Besides making it more expensive for U.S. households and businesses to borrow money, such increases in Treasury yields can deter investors from paying high prices for stocks and other investments.

Yields had dipped briefly in the morning, before rallying back, following the updates on manufacturing, which suggested that effects of Trump’s tariffs are taking root in the economy.

“The impact of ever-changing trade policies of the current administration has wreaked havoc on suppliers’ ability to react and remain profitable,” one manufacturer in the transportation equipment industry said in the Institute for Supply Management’s survey, which came in weaker than economists expected.

A separate report from S&P Global on manufacturing came in better than expected, but the overall figure “masks worrying developments under the hood of the U.S. manufacturing economy,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. He said uncertainty caused by tariffs has worries high about supplier delays and rising prices.

In stock markets abroad, Hong Kong’s Hang Seng fell 0.6% following the harsh words tossed between the United States and China. A report over the weekend also said that China’s factory activity contracted in May, although the decline slowed from April.

Indexes also dipped across much of the rest of Asia and Europe. Japan’s Nikkei 225 was one of the biggest movers after falling 1.3%.

Stan Choe, The Associated Press

AP Writers Jiang Junzhe and Matt Ott contributed