Trump's imposed tariffs are causing a significant downturn in the steel stock market.
Wall Street isn't sweating over the White House's latest tariff announcements. Instead, US stock markets are clawing back some of last week's losses. The Dow Jones, Nasdaq, and S&P 500 are all on the rise, with tech stocks joining steel and aluminum producers in the green.
The tariffs, which include a potential 25% slap on all steel and aluminum imports, provided a lift to Wall Street later in the week. The Dow soared 0.4%, reaching 44,470 points. The tech-heavy Nasdaq and broad-based S&P 500 followed suit, advancing 1% and 0.7% respectively.
American steel and aluminum manufacturers rejoiced, with shares in companies like U.S. Steel and Cleveland-Cliffs soaring. Even tech giants like Microsoft and Alphabet managed to shake off the gloom, recording modest gains.
Economic analysts, however, have offered mixed opinions. Some see the tariffs as a potential boon for struggling domestic steel and aluminum producers, while others warn of retaliatory measures from trading partners.
The positive sentiment was not limited to the US. Tech stocks in Asia also saw a rebound, with Japanese Nikkei 225 closing up 0.9%, and South Korea's Kospi advancing 0.8%. Even China's Shanghai Composite inched up 0.2%.
Oil prices also recovered, with Brent crude and WTI both gaining around 2%. Market experts attributed this to a realization that headlines of trade conflicts may persist for some time.
Gold continued its march towards new heights, surpassing $2,900 per troy ounce. With inflation fears rising, gold remains an attractive investment option for many.
As for the tech sector, uncertainty over tariff policies can lead to increased volatility, potentially affecting PE multiples. However, the long-term impact on interest rates is expected to be minimal. The potential slowdown in global economic growth due to tariffs could indirectly impact tech stocks with significant international revenue streams.
Despite these considerations, tech stocks remained resilient, with many investors viewing them as long-term growth opportunities. The sector's rebound on Monday underscores this sentiment.
[1] Source: Zacks Investment Research, Atlantic Council[3] Source: Reuters[4] Source: CNBC, Investopedia
The tariffs, despite causing concern among some economic analysts, have boosted the stock prices of American steel and aluminum manufacturers. The positive impact of tariffs on these domestic producers is contrasted by potential retaliatory measures from trading partners.
Amidst the ongoing trade tensions, tech stocks have managed to record modest gains, showing resilience and continuing to be viewed as long-term growth opportunities by many investors.
