A look at the day ahead in U.S. and global markets from Mike Dolan
Old and new economy stocks keep Wall Street pumped up this week as tech and steel sectors advance on a mix of tariff news and an artificial intelligence buzz, with Treasuries in thrall to Federal Reserve boss Jerome Powell’s latest trip to Congress.
U.S. President Donald Trump raised tariffs on steel and aluminum imports on Monday to a flat 25% “without exceptions or exemptions,” in a move he hopes helps struggling U.S. firms in the sector but which risks sparking a multi-front trade war.
Steel imports account for 23% of American steel consumption in 2023, according to American Iron and Steel Institute data, with Canada, Brazil and Mexico the largest suppliers.
Trump also said he would, within two days, follow Monday’s action with reciprocal tariffs on all countries that impose duties on U.S. goods, looking at tariffs on cars, semiconductors and pharmaceuticals.
And in another aside, he said he had spoken to Chinese President Xi Jinping since taking office on January 20 – without offering details on the topics of their conversation.
The upshot of the tariffs was a lift to U.S. steelmakers on Monday, with shares in overseas rivals taking another marginal hit on Tuesday. Thyssenkrupp and Salzgitter in Germany, for example, were down 1% each earlier.
The lift to U.S. metals firms – with the likes of Nucor, U.S. Steel and Steel Dynamics gaining 4% on Monday and Alcoa up 2% – helped the benchmark S&P500 recover early losses on Monday and end higher.
Currency markets appeared to brush the steel tariffs aside, with the dollar only marginally higher. Gold climbed to a another record high, however, with spot gold briefly hitting $2,942.70 per ounce before retreating.
Stock futures gave back some of those index gains ahead of Tuesday’s bell, in part due to rising long-term Treasury yields as Powell prepared his semi-annual congressional testimony and ahead of the week’s big debt sales.
AI EXCITEMENT
But stocks were buoyed by a new leg higher in tech on Monday, too. AI chipmakers Nvidia and Broadcom rose almost 3%.
Some of the latest AI excitement came from news that a consortium led by Elon Musk offered $97.4 billion to buy the nonprofit that controls OpenAI – a twist in the billionaire’ s fight to block the AI startup’s transition to a for-profit firm. Musk’s auto giant Tesla lost 3% on the report.
Broader optimism in U.S. stocks comes from the latest tallies on the corporate earnings season – now more than half way through.