US Stocks Rise Amid Tariff Announcement
U.S. stocks surged on Monday, driven by gains in steelmakers after President Donald Trump announced impending tariffs on steel and aluminum imports.
Market Performance
* The Dow Jones Industrial Average (^DJI) rose 0.2%.
* The S&P 500 (^GSPC) climbed roughly 0.6%.
* The tech-heavy Nasdaq Composite (^IXIC) jumped more than 1%.
Tariff Impact
Trump's proposed tariffs are anticipated to benefit U.S. steel companies, which experienced significant stock gains.
* Cleveland-Cliffs (CLF) surged over 14%.
* Nucor (NUE) rose nearly 7%.
* U.S. Steel (X) gained 3%.
Trade War Concerns
Trump's tariff announcement underscores the administration's aggressive trade policy approach, raising concerns about a potential trade war.
* Major U.S. suppliers Canada and Mexico face significant impact from the tariffs.
* Reciprocal tariffs from other countries are expected, which could escalate the trade dispute.
Inflationary Pressures
Analysts warn that the escalating tariff hikes may drive up inflation, potentially delaying interest rate cuts.
* The Consumer Price Index reading due on Wednesday will provide clues on inflation trends.
* The New York Fed survey indicates consumer expectations for inflation have risen to 3%.
Earnings Reports
* 78 S&P 500 companies are scheduled to report earnings this week.
* McDonald's (MCD) shares rose after exceeding sales estimates.
* Coca-Cola (KO), Super Micro Computer (SMCI), and Airbnb (ABNB) are expected to report earnings later this week.
Long-Term Inflation Expectations Rise
The latest New York Fed survey shows consumers' long-term inflation expectations have ticked up to 3%, the highest since May 2024.
Stagflationary Risks
Some economists, including Apollo Global Management's Torsten Sløk, caution that a full-scale trade war could induce a "stagflationary shock" in the U.S. economy.
Gold Rallies
Gold surged past $2,900 per ounce, hitting new records on Monday as investors sought safe-haven assets amid tariff threats.