U.S. stocks dropped in overnight trading after US President Donald Trump dialed up trade tensions saying he would double tariffs on steel and aluminum imports. Oil climbed as geopolitical tensions outweighed a supply boost by OPEC+.

US equity-index futures slipped 0.2% in early trading following Trump’s Friday announcement. Contracts for Asian markets also pointed to a weak open. Treasury futures opened higher, gold edged up and the yen strengthened in appetite for safe haven assets. Crude oil gained after OPEC+ agreed to lift output by 411,000 barrels a day, and following an escalation in Ukraine’s attacks on Russia.

The caution in stock markets comes after global shares notched their best month since November 2023 in May, as traders speculated the worst of the US tariff threat has passed. Markets also face the prospect of more uncertainty over trade policy and negotiations among US lawmakers on a sweeping tax and spending bill.

Shares of steelmakers and aluminummakers surged in overnight trading after the market close as investors bet the new levies will help its profits. Cleveland-Cliffs soared 30%, Century Aluminum leaped 19%, Steel Dynamics surged 12%, Nucor jumped 11%, Commercial Metals jumped 8%, and U.S. Steel rose 1%.

Chinese electric vehicle makers posted another strong month of growth in May as Tesla sales continue to flag. Investors, however, haven't been worried about Tesla's car sales lately. Several Chinese carmakers report monthly sales on the first day of a new month. For May, Li Auto delivered 40,856 vehicles, up 17% from a year ago. XPeng delivered 33,525 vehicles in May, up 230% from last year. NIO delivered 23,231 vehicles in May, up 13%.

Tesla shares dropped 1% in overnight trading. While NIO and XPeng rose 1%.