A private gauge of China’s manufacturing activity tumbled in May, touching the lowest level since September 2022 as tariffs continue to weigh, despite the U.S. trade truce. The Caixin manufacturing purchasing managers index signaled a contraction for the first time in eight months.

China's factory activity likely contracted for a second month in May, a Reuters poll showed on Friday, suggesting trade tensions with major export markets are weighing on manufacturers' minds as the world's top two economies seek a way out of a tariff war.

Chinese manufacturing activity in May experienced its fastest decline since September 2022. The PMI index, which gauges the economic health of China's industrial sector, was 48.3 points in May compared to 50.