The S&P 500 rebounded on Monday, overcoming early losses to close higher amid renewed tensions between the United States and China. By the end of trading at 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average had increased by 35 points (0.1%), the S&P 500 rose 0.5%, and the Nasdaq 100 surged 0.7%. This positive performance comes on the heels of a strong May, where the S&P 500 surged more than 6%, marking its best monthly change since November 2023.

Reasons Behind the Stock Market Recovery

1. Momentum from Last Month: Following a robust 6% gain in May, many investors interpreted Monday’s minor pullback as a chance to take profits rather than a signal for significant downturn.

2. Economic Resilience: Strong U.S. economic data on consumer spending and labor markets continue to support risk assets, even amidst elevating trade concerns.

3. Growth Sector Rotation: The late-day boost came from technology and communications sectors, indicating a sustained interest in growth stocks.

To keep tabs on live movements in U.S. equities, check out the top movers available on Entreprenerdly.com.

Latest Developments in U.S.-China Trade Relations

Earlier on Monday, China’s Commerce Ministry condemned President Trump’s allegations regarding a violation of the Geneva agreement reached in mid-May. This agreement had initially paused significant tariffs for 90 days while allowing China to lift countermeasures on essential metals for U.S. tech manufacturing.

• Trump’s Accusations: Trump claimed that China had backed away from agreements related to tariff reductions.

• China’s Reaction: Beijing termed these claims as baseless and warned of strong measures to safeguard its interests.

• Insights from Treasury: Last week, U.S. Treasury Secretary Scott Bessent mentioned that talks with Beijing had hit a snag, adding to the uncertainty.

Stay informed on upcoming trade negotiations and policy changes via the Entreprenerdly.com Economics Calendar API.

What Investors Should Monitor Next

1. Tariff Deadline Alerts: Look out for announcements as the 90-day tariff pause approaches its mid-August expiration.

2. Upcoming U.S. Economic Releases: Core inflation data and labor market reports scheduled for this week could trigger market volatility.

3. Sector Trends: Pay attention to shifts within technology and communication sectors that might indicate renewed risk appetite, or rotate towards defensives in case of escalating trade issues.

Despite the friction between the U.S. and China, strong U.S. economic fundamentals aided by recent market momentum allowed stocks to weather Monday’s challenges. Keeping a watchful eye on active stock movements and critical trade policy deadlines enables investors to better navigate any upcoming volatility.