The IBEX 35 kicked off June with a modest upward trend, as investors adopted a cautious stance in response to escalating trade tensions between the United States and China. This comes after fresh tariff threats from U.S. President Donald Trump and a renewed exchange of accusations between Washington and Beijing.
On Friday, Trump announced an increase in tariffs on imported steel and aluminum from 25% to 50%, a move that sparked outrage among European Union negotiators.
The U.S. president also accused China of violating a bilateral agreement to reduce tariffs--allegations Beijing dismissed as "baseless," while vowing to take strong measures to safeguard its interests.
Against this backdrop, Treasury Secretary Scott Bessent stated that Trump would soon speak with Chinese President Xi Jinping to resolve a dispute over critical minerals. However, China suggested that such a call could be delayed.
On the macroeconomic front, investors will be keeping a close eye on manufacturing sector surveys on both sides of the Atlantic. The main event of the week, however, will come on Friday with the release of the U.S. employment report. According to a Reuters poll, 130,000 jobs are expected to have been created in May, down from 177,000 in April, with the unemployment rate holding steady at 4.2%.
On Thursday, market attention will turn to the earnings results of U.S. tech giant Broadcom and the European Central Bank (ECB) interest rate decision. A 0.25 percentage point cut is anticipated, and investors will be closely monitoring comments from ECB President Christine Lagarde regarding the economic and monetary outlook.
Given the complex trade and macroeconomic landscape, analysts at Bankinter warn of the difficulty in "knowing where we stand in terms of taking or avoiding risks, due to confusing and often contradictory information."
They expect the market to be "increasingly less affected by Trump's erratic tariff decisions," but assume a flat 10% tariff and higher rates depending on sectors and countries. This could weigh on equities and hinder bond improvement amid deteriorating fiscal prospects.
After posting its largest monthly gain since February in May, at 0705 GMT on Monday the Spanish IBEX 35 benchmark index was up 0.28% at 14,192 points, while the FTSE Eurofirst 300 index of leading European shares slipped 0.08%.
In the banking sector, Santander rose 0.09%, BBVA edged up 0.04%, Caixabank slipped 0.24%, Sabadell fell 0.64%, Bankinter gained 0.31%, and Unicaja Banco was up 0.15%.
Among major non-financial stocks, Telefónica gained 0.32%, Inditex fell 0.80%, Iberdrola rose 0.40%, Cellnex advanced 0.62%, and oil company Repsol added 0.42%.
Acerinox stood out, jumping 5.57% on the prospect of higher U.S. steel tariffs, as the Spanish company operates production facilities in the U.S. that would benefit from reduced external competition.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
