US Stocks Rebound as Investors Dismiss Trump's Tariff Threats
February 10, 2025
US stocks rallied on Monday, shrugging off President Trump's latest tariff threats, including new levies on steel and aluminum imports. The Dow Jones Industrial Average (^DJI) surged nearly 0.4% after booking its worst loss in nearly four weeks on Friday. The S&P 500 (^GSPC) gained roughly 0.6%, while the Nasdaq Composite (^IXIC) rose almost 1% as shares of AI chip giant Nvidia (NVDA) jumped 3%, along with other tech stocks.
Investors assessed Trump's recent announcement to impose additional 25% tariffs on all steel and aluminum imports, with the official announcement expected Monday. The new metals tariffs are likely to benefit US steel companies, whose stocks soared. Shares in Cleveland-Cliffs (CLF), Nucor (NUE), and US Steel (X) all surged. Aluminum producer Alcoa's (AA) stock also gained.
The move represents another escalation in Trump's aggressive policy overhaul and increases the likelihood of a trade war, after tariffs against US trade partners Canada and Mexico were paused last week. Meanwhile, markets anticipate Trump to announce retaliatory tariffs this week that could match the duties levied on US products by each country. However, Monday's gains for US stocks suggest that investors are becoming accustomed to Trump's trade salvos. Some on Wall Street believe the announcements are now seen primarily as a negotiation tactic.
However, markets remain concerned that the growing list of tariff hikes could drive up inflation, potentially stalling interest rate cuts. The January Consumer Price Index reading due on Wednesday will be closely watched for clues, alongside the week's updates on retail sales. The latest New York Fed survey released on Monday revealed that consumers expect long-term inflation to rise to 3% — the highest reading since May 2024.
On the corporate front, 78 S&P 500 companies are set to report earnings this week. McDonald's (MCD) shares climbed after same-store sales growth exceeded expectations. Coca-Cola (KO), Super Micro Computer (SMCI), and Airbnb (ABNB) are scheduled to report later this week.