Wall Street opens lower as trade tensions reignite; S&P 500 still on track for best month since 2023

Wall Street opens lower as trade tensions reignite; S&P 500 still on track for best month since 2023

Stocks opened lower Friday as Wall Street pulled back to close out a strong May, rattled by a fresh flare-up in trade tensions between the U.S. and China.

The Dow Jones Industrial Average fell 133 points, or 0.3%, shortly after the opening bell. The S&P 500 and Nasdaq Composite both declined 0.3%, with all three indexes retreating from recent highs.

Market sentiment took a hit after President Donald Trump accused China of violating its current trade agreement with the U.S., raising concerns that a prolonged trade war could once again be on the horizon. The comments, made via social media, followed remarks from Treasury Secretary Bessent, who said in a Fox News interview that trade negotiations with China are “a bit stalled.”

Adding to the uncertainty, Trump’s plan to impose sweeping tariffs remains in legal limbo. The Court of International Trade on Wednesday halted most of the tariffs, though an appeals court on Thursday issued a temporary stay, allowing the duties to remain in place through next week.

According to The Wall Street Journal, the White House is exploring the Trade Act of 1974 as a legal workaround to impose tariffs of up to 15% for 150 days. The legal ambiguity has unsettled markets already uneasy about trade policy and broader macroeconomic risks.

Despite Friday’s decline, major indexes are still on pace to notch impressive monthly gains. The S&P 500 is up more than 5% in May, on track for its best monthly performance since 2023. The Nasdaq Composite has climbed 9.5%, while the Dow has added 3%.

The rally earlier in the month was fueled in part by a surprise trade agreement between the U.S. and the U.K., which lifted hopes that similar deals could follow. However, those gains are now being tested by renewed geopolitical friction.

On a weekly basis, the S&P 500 is up 1.5%, the Dow has gained 1%, and the Nasdaq is higher by 1.9%.

Investors are also awaiting the latest reading of the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) index, due later Friday, which could further influence market direction heading into June.