CNBC Daily Open: Recent gains in markets are likely just short-term optimism

Over the past week, Washington and Beijing have been trading barbs about violating their preliminary trade deal. Aside from that, higher steel and aluminum tariffs announced by U.S. President Donald Trump will kick in Wednesday.

Amid all the trade tensions, the Organisation for Economic Co-operation and Development slashed its U.S. and global growth forecast for this year and the next, citing "barriers to trade tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty."

Investors, however, are still pushing up stocks, with Nvidia on Tuesday regaining the crown of most valuable public company. That said, CFRA Research's Sam Stovall thinks that the market is "going to just sort of bob and weave in the meantime until we start to get a clearer understanding, if we get one, of the outlook for earnings, GDP growth, etc."

In other words, recent gains in markets aren't likely to be indicative of a longer-term trajectory. Where stocks go will depend on where the U.S. economy lands amid the developments surrounding tariffs.

Markets in U.S. and Europe rise
U.S. stocks climbed Tuesday, boosted by rises in chip stocks and more-than-expected job openings in April. The S&P 500 gained 0.58%, the Dow Jones Industrial Average advanced 0.51% and the Nasdaq Composite closed 0.81% higher. Europe's Stoxx 600 index edged up 0.09%, reversing losses from earlier in the day.

Nvidia is king again
Nvidia shares added 2.8% Tuesday to close at $141.22, giving it a market capitalization of $3.45 trillion. That move puts the chipmaker ahead of Microsoft's $3.44 trillion cap, which means Nvidia is again the most valuable publicly traded company in the world. The stock has surged more than 23% over the past month as Nvidia's growth has persisted even through export control and tariff concerns.

OECD slashes U.S. and global growth rate
The Organisation for Economic Co-operation and Development drastically cut its growth forecast for the U.S. to 1.6% in 2025 from an earlier estimate of 2.2%, according to a Tuesday report. OECD also lowered global economic growth this year to 2.9% from 3.1%. "Substantial increases in barriers to trade" is one factor weighing down growth prospects, the report said.

Inflation in the euro zone dips below 2%
Euro zone inflation fell to 1.9% in May — below the European Central Bank's 2% target — on sharp declines in services, flash data from statistics agency Eurostat showed Tuesday. Economists polled by Reuters had expected the May reading to come in at 2%, compared to the previous month's 2.2% figure. Core inflation, which excludes energy, food, tobacco and alcohol prices, also eased, falling to 2.3% in May from 2.7% in April.

Trump's bill is a 'disgusting abomination': Musk
Elon Musk in a Tuesday post on X described U.S. President Donald Trump's "big, beautiful bill" as a "disgusting abomination" and subsequently wrote that the bill "will massively increase the already gigantic budget deficit to $2.5 trillion (!!!)" Trump is still pressuring U.S. lawmakers to pass the bill, blasting Rand Paul after he said on CNBC's "Squawk Box" that he is "just not open" to supporting a $5 trillion increase in the debt ceiling.

[PRO] Watch out for new stocks in S&P
Several financial services stocks could be rotated into the S&P 500, according to Bank of America. Stocks added to the index often rise in value because funds that track the benchmark will add it to their portfolios, so investors should pay attention to the moves, which will be announced by the end of the week. 

Tesla's planned robotaxi launch in tech-friendly Austin has Musk playing catch-up in his hometown

Tesla's long-awaited entry into the robotaxi market — expected later this month — will begin in Austin, Texas, which has emerged as a key battleground for self-driving technology.

CEO Elon Musk wrote in a post on X last week that the company has been testing Model Y vehicles with no safety drivers on board in the Texas capital for several days.

But while the market remains nascent, Tesla already faces a hefty amount of competition. Alphabet's Waymo, Amazon's Zoox, Volkswagen subsidiary ADMT and startup Avride are already present in Austin.

"The winners of the space are emerging, and it's just a matter of scaling," said Toby Snuggs, ​​head of sales and partnerships at Avride.