Dollar Soars, Gold Hits Record Amid Trade Disruption from Trump's Steel Tariffs
The US dollar strengthened, propelled by President Trump's proposed tariffs on steel and aluminum imports. This disruption in markets led to a record high for gold.
Stock Futures Signal Recovery
US stock futures indicate a rebound from Friday's decline. S&P 500 and Nasdaq 100 futures gained over 0.4%.
Currency Impact
The yen and Canadian dollar lost ground against the dollar, contributing to the rise in the Bloomberg Dollar Spot Index to its highest point in almost a week.
Haven Assets in Demand
Gold rallied as traders sought safe havens amidst uncertainty created by the president's trade threats.
US Stock Surge
American metals stocks surged, with United States Steel Corp. rising up to 15% premarket and Alcoa Corp. gaining 5%. McDonald's Corp. shares increased following positive fourth-quarter sales reports.
BP Share Surge
BP Plc shares experienced their highest surge since 2020 after Bloomberg News reported activist investor Elliott Investment Management had acquired a stake in the oil company.
Fed Testimony and Trade Tensions
Trump's announcement of a 25% tariff on steel and aluminum on Monday heightened tensions ahead of Federal Reserve Chair Jerome Powell's congressional testimony and potential reciprocal tariffs.
Market Volatility
"Our view on tariffs remains that they will cause volatility, are a negotiating tool, and will eventually be less severe than feared," said Mohit Kumar at Jefferies International.
Commodity Market
European natural gas prices reached a two-year high due to accelerated depletion of storage facilities amid colder temperatures. Benchmark natural gas futures surged by up to 4.1%.