Switzerland’s Manufacturing PMI Slumps to Multi-Month Low of 42.1, STOXX 600 Drops 0.54%

Key Moments:

Swiss Manufacturing Sector Takes a Hit

Switzerland, one of Europe’s major economies, saw its manufacturing activity continue to contract in May, with the seasonally adjusted Purchasing Managers’ Index (PMI) plunging from April’s 45.8 to 42.1. This marks the weakest reading in around a year and a half, according to data released on Monday by procure.ch and UBS. The figure also failed to reach the expected level of 48.

The sub-indices revealed widespread strain across the sector. Production dipped by 7.2 points to 42.5, while the order book index fell sharply to 35.9, an 8.7-point monthly decline. Purchasing volume also saw a 6.5-point decrease to 37.6. The report noted that although concerns over protectionism had subsided after rising in April, volatility in US trade policy was continuing to fuel uncertainty in the sector.

European Markets Give Back Gains

The Swiss PMI data coincided with a drop in European equities. The STOXX 600 declined by 0.54% in early trading hours on June 2nd, pulling back from gains of approximately 4% recorded last month. The market retreat came amid growing concerns over escalating global trade disputes and a rotation into safer assets.’

Geopolitical tensions flared after China accused the United States of breaching their recent trade agreement. The allegation followed recent remarks from President Trump, who claimed that China had already violated the deal. Adding fuel to the fire, Trump disclosed his intentions to increase steel and aluminum import duties to 50%.

Market participants will now focus on the European Central Bank, which is widely expected to announce another interest rate cut later this week. At the same time, political developments in Poland are attracting attention after Karol Nawrocki won the nation’s presidential runoff.