Dow, S&P 500, Nasdaq bounce back as Trump tariff move buoys steelmakers

Oil futures rallied on Monday, helping lift energy stocks.

The S&P 500 Energy Sector (XLE) was the biggest gainer, outperforming Tech (XLK) and Consumer Discretionary (XLY).

On Monday the stock market shrugged off escalating trade tensions, with all three major averages rallying.

Meanwhile, West Texas Intermediate crude (CL=F) and Brent futures (BZ=F) gained more than 1%, bouncing back from a three-week decline.

“The sharply higher US stock market is also bringing buyers back from the sidelines,” said Dennis Kissler, senior vice president of trading for BOK Financial Securities.

US consumers’ long-term inflation expectations moved higher in January as President Trump teased more tariff announcements over the weekend.

According to the latest survey released by the New York Federal Reserve Monday morning, consumers see inflation steady at 3% a year from now, while the three-year period also came in unchanged at 3%. Five-year inflation expectations, however, ticked up to 3% from the prior 2.7% reading — the highest since May 2024.

Year-ahead commodity price expectations rose across the board, with the outlook for gas prices rising to 2.6% in January while costs for food, medical care, college, and rent all increased to 4.6%, 6.8%, 5.9%, and 6.0%, respectively.

The results follow last week’s University of Michigan consumer sentiment survey, which showed headline sentiment decline to its lowest level in seven months. Pessimism over the inflation outlook drove down February’s preliminary read and one-year inflation expectations jumped to 4.3% from 3.3% last month.

Outside of inflation, Monday’s survey also pointed to some uncertainty within the US job market, despite Friday’s hot January payrolls report.

The mean perceived probability of losing one’s job in the next 12 months increased by 2.3 percentage points to 14.2% in January. Meanwhile, the mean perceived probability of finding a job in the next three months also increased to 51.5%, an increase of 1.4 percentage points.

Yahoo Finance’s Brian Sozzi reports:

Markets may be trying to figure out the impact of a full-on Trump trade war with Europe, China, Canada, and Mexico.

But one prominent economist says the eventual outcome could be singular.

Apollo Global Management (APO) chief economist Torsten Sløk told me on Yahoo Finance’s Opening Bid that a full-scale US trade war against the world would deliver a “stagflationary shock” to the US economy. Stagflation is defined as a period of slow growth and high inflation. It’s a tariff-related warning also recently issued by billionaire investor Ray Dalio. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

“So the short-run effects of a trade war [are] certainly painful. Even this might be small numbers, but it’s certainly something that’s negative,” Sløk said on Monday (see video above; listen below).

Read more here.

Yahoo Finance’s Ben Werschkul reports:

Donald Trump’s rapid reorientation of the US trade landscape has a busy week ahead, and he could make moves on three simultaneous fronts as importers, CEOs, and foreign leaders struggle to adjust.

The uncertainty is being heightened as crucial details remain unclear, but with the president promising “highly detailed” announcements in the days ahead.

Up first this week is a newly announced plan for 25% duties on steel and aluminum, which Trump told reporters on Sunday would be announced on Monday.

The president is set to sign new executive orders at 1 p.m. ET. He said his tariff plans will apply to all imports, but it remains to be seen how these new duties overlap with existing metal tariffs.

Read more here.

The headline is the whole story, give or take.

At midnight Saturday, this post on X emerged:

As Sherwood’s Luke Kawa notes: “Saylor runs Strategy (formerly MicroStrategy), the largest corporate holder of bitcoin. The warm market response to Cohen’s tweet suggests that traders are hoping that Cohen uses some of GameStop’s $4.6 billion in cash and cash-like securities to take a page from Saylor’s playbook. (That playbook has one rule: buy bitcoin).”

Here’s GameStop stock (GME) this morning, up as much as 7% about 30 minutes into the trading session:

Back in December 2023, GameStop’s board gave Cohen the authority to use the company’s capital to make investments, essentially laying the groundwork for GameStop to be turned into a holding company similar to the Daily Journal (DJCO) company formerly chaired by the late Charlie Munger, or, more grandiosely, Berkshire Hathaway (BRK-B, BRK-A).

Saylor’s Strategy, as Kawa notes, last week formally changed its branding and corporate goals around serving as a bitcoin holding company. (The company also has a small software business on the side.)

Longtime analyst Jeff Macke told Yahoo Finance last year he thinks GameStop should follow the same path.

And you know what they say about pictures.

Gold surged on Monday to trade past $2,900 to hit new records as President Trump’s latest tariff threats spurred the buying of the safe-haven asset.

Gold futures (GC=F) climbed more than 1.4% to around $2,930 after hitting a series of all-time highs in the past week.

Over the weekend, Trump said that he will introduce 25% tariffs on all imports of steel and aluminum into the US from all countries, on top of existing duties.

He also said Friday he plans to announce retaliatory tariffs this week to match the levies that countries impose on US goods. The latest policy shifts follow 10% tariffs on certain Chinese products, which went into effect on Tuesday.

Wall Street analysts have stayed bullish on gold amid the growing tariff threats.

“We continue to see gold as an effective portfolio hedge and diversifier, and believe an allocation of around 5% within a USD balanced portfolio is optimal,” Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, wrote in a Monday note.

Gold is up almost 10% this year so far, following a 27% rally in 2024.

US stocks opened higher on Monday with Industrials getting a lift as investors anticipate US tariffs on steel and aluminum imports will be announced soon.

The Dow Jones Industrial Average (^DJI) added 0.6% after the blue-chip index on Friday booked its worst loss in nearly four weeks. The S&P 500 (^GSPC) rose roughly 0.5%, while the tech-heavy Nasdaq Composite (^IXIC) popped 0.7%.

On Sunday, President Donald Trump said he will impose new tariffs on steel and aluminum imports, with an announcement expected on Monday. Also, investors expect Trump to announce a retaliatory tariff plan this week.

Trade tensions have prompted investors to flock to safe-haven assets like gold. The precious metal gained more than 1% on Monday, to trade above $2,900 per ounce for the first time on record.

The year-to-date gain for gold is almost 10%, following a 27% rally in 2024.