Global Markets Mostly Lower on Continued Trade Tensions; Eurozone CPI Data In Focus

By Dow Jones Newswires StaffGlobal markets were mostly lower and U.S. futures were down on continued trade tensions, and ahead of Eurozone flash CPI data Tuesday and an European Central Bank rate decision later this week.Eurozone consumer price inflation, due at 0900 GMT, is expected to have fallen to an annual rate of 2.0% from 2.2% in April, while the ECB is widely expected to cut interest rates by 0.25 basis point to 2% on Thursday.China's manufacturing activity tumbled into contraction in May, touching the lowest level since September 2022 as tariffs continue to weigh despite a trade truce with the U.S. The Caixin manufacturing purchasing managers index slid to 48.3 in May from 50.4 in April, according to data released Tuesday by Caixin Media Co. and S&P Global.U.S. futures for the S&P 500 were down 0.5% and futures for the Dow Jones Industrial Average fell 0.5%. Data from the Organization for Economic Cooperation and Development shows that the global economy is forecast to grow 2.9% this year and next, down from a previous expectation of 3.1% and 3% in 2025 and 2026, respectively. The U.S. economy is expected to be among the worst hit, growing 1.6% this year compared with 3.3% in 2024, below the OECD's previous forecast of 2.2%.In Europe, the Stoxx 600 index was down 0.3%, while Germany's DAX was 0.2% lower and London's FTSE index was down 0.1%.The Nikkei closed 0.1% lower, mainly dragged down by auto stocks. The indexes were trading higher in China, tracking Wall Street. Gains on the mainland were led by Shenzhen and ChiNext, closing 0.5% higher. The Hang Seng Index rose by 1.4%. South Korean markets are closed due to the presidential election.The dollar edged higher, recovering after falling to its lowest in six weeks against a basket of currencies and against the euro at the start of the week. The DXY dollar index rose 0.1% to 98.854, having hit a six-week low of 98.583 overnight.Oil prices rose, exacerbated by rising geopolitical tensions. Brent crude was up 0.8% at $65.17 a barrel, while WTI advanced 1% to $63.17 a barrel.Gold futures slid, paring some gains made in Monday's strong rally but remain at elevated levels due to renewed trade concerns. Futures slid 0.4% to $3,383.30 a troy ounce, having peaked at $3,417.80/oz in the prior session.The German 10-year Bund yield declined by three basis points to 2.501% from 2.53%, and the yield on the 10-year U.S. Treasury fell by three basis points to 4.421% from 4.45%. Bond prices and yields move in opposite directions.Write to Barcelona Editors at [email protected]