By STAN CHOE, Associated Press Business Writer

NEW YORK (AP) — U.S. stocks are drifting on Monday, as momentum slows following their sprint through May, which was their best month since 2023.

The S&P 500 was 0.1% lower in early trading. The Dow Jones Industrial Average was down 149 points, or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Some of the strongest action was in the oil market, where the price of crude jumped roughly 4%. The countries in the OPEC+ alliance decided to increase their production again, a move that often pushes crude prices down because it puts more on the market, but analysts said investors were widely expecting it. The past weekend’s attacks by Ukraine in Russia also helped to raise uncertainty about the flow of oil and gas around the world.

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A barrel of U.S. crude rose 3.8% to $63.11, while Brent crude, the international standard, gained 4.3% to $65.50.

The swings also came after more harsh rhetoric crossed between the world’s two largest economies, just a few weeks after they had agreed to pause many of their tariffs that had threatened to drag the economy into a recession.

China blasted the U.S. on Monday for moves that it said hurt China’s interests, including issuing AI chip export control guidelines, stopping the sale of chip design software to China and planning to revoke Chinese student visas.

“These practices seriously violate the consensus” reached during trade discussions in Geneva last month, the Commerce Ministry said in a statement. That followed President Donald Trump’s accusation at the end of last week, where he said China was not living up to its end of the agreement that paused their tariffs against each other.

Hopes for lower tariffs because of trade deals that Trump could reach with other countries were the main reasons for last month’s rally for stocks, which brought the S&P 500 back within 3.8% of its all-time high. The index had dropped roughly 20% below the mark in April.

But Trump on Friday told Pennsylvania steelworkers he’s doubling the tariff on steel imports to 50% to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods.

Later in a post on his Truth Social platform, Trump confirmed the steel tariff and said that aluminum tariffs would also be doubled to 50%. Both tariff hikes would go into effect Wednesday, Trump said.

That helped stocks of U.S. steelmakers climb. Nucor jumped 12.1%, and Steel Dynamics rallied 13.4%.

But automakers and other heavy users of metals weakened. Ford fell 2.7%, and General Motors reversed by 2.4%.

In stock markets abroad, Hong Kong’s Hang Seng fell 0.6% following the harsh words tossed between the United States and China. A report over the weekend also said that China’s factory activity contracted in May, although the decline slowed from April.

Indexes also dipped across much of the rest of Asia and Europe. Japan’s Nikkei 225 was one of the biggest movers after falling 1.3%.

In the bond market, Treasury yields rose as worries continue about how much debt the U.S. government will pile on due to plans to cut taxes and increase the deficit.

The yield on the 10-year Treasury rose to 4.43% from 4.41% late Friday and from just 4.01% roughly two months ago. That’s a notable move for the bond market.

Besides making it more expensive for U.S. households and businesses to borrow money, such increases in Treasury yields can deter investors from paying high prices for stocks and other investments.

AP Writers Jiang Junzhe and Matt Ott contributed.

By SAM McNEIL, Associated Press

BARCELONA, Spain (AP) — The European Union on Monday said it is preparing “countermeasures” against the United States after the Trump administration’s surprise tariffs on steel rattled global markets and complicated the ongoing wider tariff negotiations between Brussels and Washington.

EU Commission President Ursula von der Leyen and U.S. President Donald Trump agreed last week to “accelerate talks” on a deal, but that if those trade negotiations fail “then we are also prepared to accelerate our work on the defensive side,” European Commission spokesperson Olof Gill told a press conference in Brussels.

“In the event that our negotiations do not lead to a balanced outcome, the EU is prepared to impose countermeasures, including in response to this latest tariff increase,” Gill said.

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He said the EU is finalizing an “expanded list of countermeasures” that would “automatically take effect on July 14 or earlier.” That’s the date when a 90-day pause, intended to ease negotiations, ends in tariffs announced by the two economic powerhouses on each other. About halfway through that grace period, Trump announced a 50% tariffs on steel imports.

Trump’s return to the White House has come with an unrivaled barrage of tariffs, with levies threatened, added and, often, taken away. Top officials at the EU’s executive commission says they’re pushing hard for a trade deal to avoid a 50% tariff on imported goods. Negotiations will next continue on Wednesday in Paris in a meeting between the EU’s top trade negotiator, Maroš Šefčovič, and his counterpart, U.S. Trade Representative Jamieson Greer.

The EU could possibly buy more liquefied natural gas and defense items from the U.S., as well as lower duties on cars, but it isn’t likely to budge on calls to scrap the value added tax — which is akin to a sales tax — or open up the EU to American beef.

The EU has offered the U.S. a “zero for zero” outcome in which tariffs would be removed on both sides for industrial goods including autos. Trump has dismissed that but EU officials have said it’s still on the table.

The announcement Friday of a staggering 50% levy on steel imports stoked fear that big-ticket purchases from cars to washing machines to houses could see major price increases. But those metals are also so ubiquitous in packaging that they’re likely to pack a punch across consumer products from soup to nuts.

By MEHMET GUZEL, Associated Press

ISTANBUL (AP) — Delegations from Russia and Ukraine met Monday in Turkey for their second round of direct peace talks in just over two weeks, although expectations were low for any significant progress on ending the3-year-old war after a string of stunning attacks over the weekend.

Kyiv officials said a surprise drone attack Sunday destroyed more than 40 warplanes at air bases deep inside Russia, including the remote Arctic, Siberian and Far East regions more than 4,300 miles from Ukraine.

The complex and unprecedented raid, which struck simultaneously in three time zones, took over a year and a half to prepare and was “a major slap in the face for Russia’s military power,” said Vasyl Maliuk, the head of the Ukrainian security service who led its planning.

Ukrainian President Volodymyr Zelenskyy called it a “brilliant operation” that would go down in history. The operation destroyed or heavily damaged nearly a third of Moscow’s strategic bomber fleet, according to Ukrainian officials.

Russia on Sunday fired the biggest number of drones — 472 — at Ukraine since its full-scale invasion in 2022, Ukraine’s air force said, in an apparent effort to overwhelm air defenses. That was part of a recently escalating campaign of strikes in civilian areas of Ukraine.

In this photo released by Governor of Irkutsk region Igor Kobzev telegram channel on Sunday, June 1, 2025, plumes of smoke are seen rising over the Belaya air base in the Irkutsk region in eastern Siberia after a Ukrainian drone attack in the Irkutsk region, more than 4,000 kilometers (2,500 miles) from Ukraine. (Governor of Irkutsk region Igor Kobzev telegram channel via AP)

Hopes not high for the peace talks

In the aftermath of those strikes, Turkish Foreign Minister Hakan Fidan chaired the peace talks at Istanbul’s Ciragan Palace, a residence dating from the Ottoman Empire.

The talks aim to discuss both sides’ ceasefire terms, he said, adding that “the whole world’s eyes are focused on the contacts and discussions you will have here.”

Members of the Ukrainian delegation arrive at the Ciragan Palace for Ukraine-Russia peace talks in Istanbul, Turkey, Monday, June 2, 2025. (AP Photo/Emrah Gurel)

U.S.-led efforts to push the two sides into accepting a ceasefire have so far failed. Ukraine accepted that step, but the Kremlin effectively rejected it.

The Ukrainian delegation was led by Defense Minister Rustem Umerov, while Vladimir Medinsky, an aide to Russian President Vladimir Putin, headed the Kremlin team.

The Russian and Ukrainian delegations, each numbering more than a dozen people, sat at a U-shaped table across from each other with Turkish officials between them. Many of the Ukrainians wore military fatigues.

Recent comments by senior officials in both countries indicate they remain far apart on the key conditions for stopping the war.

The Institute for the Study of War, a Washington-based think tank, said Sunday that “Russia is attempting to delay negotiations and prolong the war in order to make additional battlefield gains.”

The relentless fighting has frustrated U.S. President Donald Trump’s goal of bringing about a quick end to the war. A week ago, he expressed impatience with Putin as Moscow pounded Kyiv and other Ukrainian cities with drones and missiles for a third straight night. Trump said on social media that Putin “has gone absolutely CRAZY!”

A round of renewed direct talks, held May 16, also in Istanbul, ended after less than two hours. While both sides agreed on a large prisoner swap, there was no breakthrough.

Ukraine upbeat after strikes on air bases

Ukraine was triumphant after targeting the distant Russian air bases. The official Russian response was muted, with the attack getting little coverage on state-controlled television. Russia-1 TV channel on Sunday evening spent a little over a minute on it with a brief Defense Ministry statement read out before images shifted to Russian drone strikes on Ukrainian positions.

Zelenskyy said the setbacks for the Kremlin would help force it to the negotiating table, even as its pursues a summer offensive on the battlefield.

“Russia must feel what its losses mean. That is what will push it toward diplomacy,” he said Monday in Vilnius, Lithuania, meeting with leaders from the Nordic nations and countries on NATO’s eastern flank.

Ukraine has occasionally struck air bases hosting Russia’s nuclear capable strategic bombers since early in the war, prompting Moscow to redeploy most of them to the regions farther from the front line.

Because Sunday’s drones were launched from trucks close to the bases in five Russian regions, military defenses had virtually no time to prepare for them.

Many Russian military bloggers chided the military for its failure to build protective shields for the bombers despite previous attacks, but the large size of the planes makes that challenging.

The attacks were “a big blow to Russian strategic airpower” and exposed significant vulnerabilities in Moscow’s military capabilities, said Phillips O’Brien, a professor of strategic studies at the University of St. Andrews in Scotland.

Edward Lucas, a senior fellow at the Washington-based Center for European Policy Analysis, called it “the most audacious attack of the war” and “a military and strategic game-changer.”

“Battered, beleaguered, tired, and outnumbered, Ukrainians have, at minimal cost, in complete secrecy, and over vast distances, destroyed or damaged dozens, perhaps more, of Russia’s strategic bombers,” he said.

Front-line fighting and shelling grinds on

Zelenskyy said that “if the Istanbul meeting brings nothing, that clearly means strong new sanctions are urgently, urgently needed” against Russia.

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International concerns about the war’s consequences, as well as trade tensions, drove Asian share prices lower Monday while oil prices surged.

Fierce fighting has continued along the roughly 620-mile front line, and both sides have hit each other’s territory with deep strikes.

Russian forces shelled Ukraine’s southern Kherson region, killing three people and injuring 19 others, including two children, regional officials said Monday.

Also, a missile strike and shelling around the southern city of Zaporizhzhia, killing five people and injured nine others, officials said.

Russian air defenses downed 162 Ukrainian drones over eight Russian regions overnight, as well as over the Crimean Peninsula, Russia’s Defense Ministry said Monday. Moscow illegally annexed the peninsula in 2014,Crimea,

Ukrainian air defenses damaged 52 out of 80 drones launched by Russia overnight, the Ukrainian air force said.

Associated Press writers Suzan Frazer in Ankara, Turkey; Hanna Arhirova in Kyiv, Ukraine, and Geir Moulson in Berlin contributed.

By MARK SHERMAN, Associated Press

WASHINGTON (AP) — The sequence of events is familiar: A lower court judge blocks a part of President Donald Trump’s agenda, an appellate panel refuses to put the order on hold while the case continues and the Justice Department turns to the Supreme Court.

Trump administration lawyers have filed emergency appeals with the nation’s highest court a little less than once a week on average since Trump began his second term.

The court is not being asked to render a final decision but rather to set the rules of the road while the case makes it way through the courts.

The justices have issued orders in 11 cases so far, and the Trump administration has won more than it has lost.

Among the administration’s victories was an order allowing it to enforce the Republican president’s ban of on transgender military service members. Among its losses was a prohibition on using an 18th century wartime law called the Alien Enemies Act to deport Venezuelans alleged to be gang members to a notorious prison in El Salvador.

The most recent emergency filing arrived May 27.

A judge rebuked the administration over deportations to South Sudan

The Trump administration’s latest appeal asks the high court to halt an order by U.S. District Judge Brian Murphy in Boston. The White House violated his earlier order, Murphy found, with a deportation flight bound for the African nation carrying people from other countries who had been convicted of crimes in the U.S.

Those immigrants must get a real chance to raise any fears that being sent there could put them in danger, Murphy wrote.

Trump’s top Supreme Court lawyer, Solicitor General D. John Sauer, asked for an immediate high court order that would allow the third-country deportations to resume.

Murphy has stalled efforts to carry out deportations of migrants who can’t be returned to their home countries, Sauer wrote. Finding countries willing to take them is “a delicate diplomatic endeavor” and the court requirements are a major setback, he said.

Lawyers for the deported men have until Wednesday to respond.

A watchdog group is trying to bring transparency to DOGE

The Department of Government Efficiency, overseen by billionaire Trump adviser Elon Musk until his departure on Friday, is resisting a lawsuit calling for it to publicly disclose information about its operations.

Citizens for Responsibility and Ethics in Washington argues in a lawsuit that DOGE, which has been central to Trump’s push to remake the government, is a federal agency and must be subject to the Freedom of Information Act.

CREW claims that DOGE “wields shockingly broad power” with no transparency about its actions. The administration says DOGE is just a presidential advisory body that is exempt from FOIA disclosures.

U.S. District Judge Christopher Cooper had found that its role is likely more than just advisory, especially in helping to shutter the U.S. Agency for International Development and cut billions of dollars in government contracts.

The administration appealed Cooper’s orders requiring documents be turned over and acting Administrator Amy Gleason to answer questions under oath.

Last week, Chief Justice John Roberts agreed to temporarily pause the orders pending additional word from the Supreme Court.

A judge blocked DOGE’s access to Social Security systems over privacy concerns

Social Security has personal data on nearly everyone in the country, including school records, bank details, salary information and medical and mental health records for disability recipients, according to court documents.

The Trump administration says DOGE needs access to Social Security’s systems as part of its mission to target waste in the federal government.

But U.S. District Judge Ellen Hollander in Maryland restricted the team’s access to Social Security under federal privacy laws, saying DOGE’s efforts at the agency amounted to a “fishing expedition” based on “little more than suspicion” of fraud.

The judge is disrupting DOGE’s work and interfering with decisions that belong to the executive branch, not courts, Sauer wrote in asking the high court to block Hollander’s order in the suit filed by labor unions and retirees.

The justices could act anytime.

Trump wants to change citizenship rules in place for more than 125 years

Several judges quickly blocked an executive order Trump signed his first day in office that would deny citizenship to children who are born to people who are in the country illegally or temporarily.

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The administration appealed three court orders that prohibit the changes from taking effect anywhere in the country.

Earlier in May, the justices took the rare step of hearing arguments in an emergency appeal. It’s unclear how the case will come out, but the court seemed intent on keeping the changes on hold while looking for a way to scale back nationwide court orders.

One possibility advanced by some justices was to find a different legal mechanism, perhaps a class action, to accomplish essentially the same thing as the nationwide injunctions blocking Trump’s citizenship order.

Nationwide injunctions have emerged as an important check on Trump’s efforts to remake the government and a source of mounting frustration to the Republican president and his allies.

Judges have issued 40 nationwide injunctions since Trump began his second term in January, Sauer told the court during the arguments.

The court could act anytime, but almost certainly no later than early summer.