The U.S Stock Market Wobbles at the Open as Growth Concerns Return

U.S. stocks saw a mixed start on Tuesday as worries over global economic growth returned to the spotlight. The Organization for Economic Cooperation and Development (OECD), based in Paris, issued a warning that former President Donald Trump’s trade policies have helped push the global economy into a downturn.

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By 9:37 a.m. in New York, major indexes showed little overall movement. The S&P 500 and Nasdaq 100 barely budged, while the Dow Jones Industrial Average edged up by 0.1%.

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Some individual stocks stood out amid the broader market indecision. Dollar General Corp. shares surged 12% after the discount retailer slightly boosted its annual outlook and expressed confidence in its ability to counteract many of the tariffs currently affecting its business. Joby Aviation Inc. also posted significant gains, with its stock jumping 13% on news of a potential deal to sell up to 200 of its electric air taxis to a key Saudi Arabian investor. The deal could be worth as much as $1 billion.

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Elsewhere, Constellation Energy Corp. saw its shares climb 5.5% after reaching an agreement to provide electricity from an Illinois-based nuclear plant to tech giant Meta Platforms Inc.

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Despite some positive developments on the corporate front, overall investor sentiment was cautious. The OECD revised its global growth forecast downward, predicting worldwide economic expansion would slow to 2.9% in 2025, down from 3.3% the year before. The U.S. economy in particular is expected to decelerate sharply, with growth forecast to fall to 1.6% from 2.8%. This revised outlook is notably more pessimistic than the OECD’s projections from just a few months earlier, in March.

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Trade tensions continued to influence market direction. U.S. Commerce Secretary Howard Lutnick struck an optimistic tone, saying he believes a trade agreement between the U.S. and India is likely.

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Meanwhile, a potential phone conversation between Donald Trump and Chinese President Xi Jinping is anticipated this week. In addition, UK Business Secretary Jonathan Reynolds is preparing to meet with U.S. Trade Representative Jamieson Greer in hopes of salvaging a trade deal that would eliminate tariffs on British steel exports.

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“Trade tensions remain front and center for investors,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners. “Ongoing back-and-forth between the U.S. and China continues to cast uncertainty over recent progress made in Geneva.”

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Market participants are also awaiting more economic data throughout the day. Key releases include the Job Openings and Labor Turnover Survey (JOLTS) and U.S. factory orders for April. These indicators will provide further insight into the health of the labor market and industrial sector.

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Outside the U.S., troubling economic signs emerged from Asia and Europe. In China, a private survey showed that the country’s manufacturing sector experienced its steepest decline since September 2022. Smaller exporters were particularly hurt, as elevated tariffs continued to weigh on trade, even though a temporary truce in the trade dispute with the U.S. is still in place.

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In Europe, inflation in the eurozone came in lower than expected. Price increases fell below the European Central Bank’s target of 2%, adding fuel to expectations that policymakers could opt for more interest rate cuts in the near future.

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In South Korea, political developments also attracted attention. Lee Jae-myung, the candidate from the opposition Democratic Party, appeared set to win the country’s presidential election. His likely victory would mark the end of three years of conservative leadership and potentially usher in significant changes to economic and foreign policy.

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Looking ahead, some analysts expect subdued trading as investors digest the substantial rally seen throughout May. However, they warn that the market remains vulnerable to sudden shifts.

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“Today might be a quieter session as markets consolidate gains from the recent rally,” wrote Tom Essaye of the Sevens Report in a client note. “Still, the possibility of profit-taking is real if any negative news breaks during the day.”

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Overall, while certain sectors and companies are showing strength, the broader outlook is clouded by global trade issues, slowing growth forecasts, and upcoming economic data releases that could sway investor mood further.

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