US Stocks Rise Amid Trade Tension and Tariff Announcements
Wall Street witnessed a positive opening on Monday, as investors anticipated the announcement of US tariffs on steel and aluminum imports. The Dow Jones Industrial Average (^DJI) surged 0.6%, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) rose 0.5% and 0.7%, respectively.
Tariffs Boost Metals Stocks
Steel companies experienced a jump in share prices following President Trump's announcement that he would impose 25% tariffs on steel and aluminum imports from all countries. Cleveland-Cliffs (CLF), Nucor (NUE), and US Steel (X) all saw significant gains. Alcoa (AA), an aluminum producer, also benefited from the news.
Inflation Concerns Linger
Despite the market's optimism, concerns remain about the potential inflationary impact of the growing list of tariff hikes. The Consumer Price Index reading for January, due out on Wednesday, will be closely monitored for indications of rising prices.
Strong Earnings Reports
Several companies reported strong earnings this week. McDonald's (MCD) shares rose after same-store sales surpassed expectations. Coca-Cola (KO) and Airbnb (ABNB) are set to announce earnings later this week.
Energy Sector Rises
Oil futures rallied on Monday, buoying energy stocks. The S&P 500 Energy Sector (XLE) led the market rally, outperforming tech and consumer discretionary sectors.
Long-Term Inflation Expectations Increase
The New York Federal Reserve's latest survey revealed that consumers' long-term inflation expectations ticked higher in January, with five-year inflation expectations reaching 3%—the highest since May 2024.
Trump Launches Multi-Front Trade Overhaul
President Trump's trade policy overhaul continues this week, with the announcement of tariffs on steel and aluminum, retaliatory measures against foreign tariffs, and potential changes to trade agreements with the EU, China, Canada, and Mexico.
US Importers and Companies Face Uncertainty
The ongoing trade tensions are creating uncertainty for US importers and corporations as they adjust to the rapidly changing landscape.
Gold Prices Hit Record High
Gold surged past $2,900 per ounce on Monday, reaching new records amid safe-haven demand following the latest tariff threats.