Stocks opened in the red but finished with gains on Monday despite potential risk to a U.S.-China trade deal reached in January and unrest across U.S. cities. American manufacturing remains weak, but has shown signs of growth.
The Dow Jones Industrial Average rose 91.91 points, or 0.36%, to close at 25,475.02. The S&P 500 is up 11.42 points, or 0.38%, to end at 3055.73, and the Nasdaq Composite gained 62.18 points, or 0.66%, to close at 9552.05.
Over the weekend, protests and riots have gripped the nation in the wake of the killing of George Floyd in Minneapolis. In some cities, stores were looted, and buildings and cars were set ablaze. In a video chat on Monday morning, President Donald Trump has called on governors to crack down more violently on protesters.
Retailers are closing locations and adjusting opening hours to shield themselves from the chaos, but the scale of financial losses are still unclear. Still, markets have largely overlooked the chaos for now.
The SpaceX rocket launch also dominated the headlines over the weekend. The launch signified the first time NASA astronauts traveled to space on commercially built equipment, signaling a new era in space technology and space investing. Privately held SpaceX is headed by Tesla (ticker: TSLA) CEO Elon Musk and Tesla stock is getting a nearly 8% bump from the positive outcome of the launch.
Elsewhere, China has reportedly instructed state-owned businesses to stop buying American soybeans and pork, as the tension between the two countries continues to ramp up. The move is likely a retaliation to the U.S. as the Trump administration said last Friday that it would revoke special privileges for Hong Kong after Beijing imposed a new security law that erodes the territory's autonomy.
Analyzes have warned that any signs the trade deal could be at risk would get the market's attention, as both the U.S. and China are grappling with the fallout from the Covid-19 pandemic.
China’s official manufacturing purchasing managers index came in at 50.6 for the month of May, according to data by the National Bureau of Statistics on Sunday. While factory activities showed continued expansion, the magnitude of the gains fell for a second straight month, dropping from 50.8 in April, and 52 in March.
The U.S. economy, on the other hand, is showingimproved conditions in the post-lockdown recovery. The Institute for Supply Management said on Monday its gauge of manufacturing activity rose to 43.1 in May from 41.5 in April. In a separate report, IHS Markit said its measure of U.S. factory activity increased to 39.8 in May from 36.1 a month earlier. Still, both figures represent deep contractions, as any reading below 50 reflects slowing activity.