Wall Street mixed after Trump's steel tariff threat
NEW YORK: Wall Street's main indexes were mixed on Monday after President Donald Trump said he plans to double tariffs on imported steel and aluminum, fueling more uncertainty around US trade policies.
Trump said late on Friday he planned to increase tariffs on imported steel and aluminium to 50% from 25% starting Wednesday, just hours after he accused China of violating an agreement. Shares of US steel companies rose, with Cleveland-Cliffs jumping 23.6%, Nucor up 9.2% and Steel Dynamics 10.1% higher. However, shares of automakers fell. Ford was down 4.3% and General Motors was 4.7% lower.
'It's the continued uncertainty, not knowing whether the trade war is on or it's off,' said Sam Stovall, chief investment strategist at CFRA Research. 'Something new gets added, something gets postponed, so essentially it is that uncertainty reigns.'
The increased levies risk deepening Trump's global trade war, and dousing enthusiasm in markets stemming from the US president's softer trade stance that drove a recovery in risky assets last month.
A temporary relief on some levies on China and a rollback of steep tariff threats on the European Union, along with strong earnings and improving economic picture helped the benchmark S&P 500 log its best monthly performance in 18 months in May. Also fueling risk-off moves in global markets, Kyiv struck some of Moscow's nuclear-capable bombers on Sunday, renewing concerns around further escalation of the war.
At 11:49 a.m. ET, the Dow Jones Industrial Average fell 196.92 points, or 0.47%, to 42,073.15, the S&P 500 lost 9.21 points, or 0.16%, to 5,902.48 and the Nasdaq Composite gained 17.73 points, or 0.09%, to 19,131.49. Seven of the 11 major S&P 500 sub-sectors fell, with consumer discretionary declining the most with a nearly 1% fall.
On the flip side, energy rose over 1% tracking a rise in oil prices. US-listed energy stocks advanced after producer group OPEC+ kept output increases in July at the same level as the previous two months. Most megacap and growth stocks fell, with Tesla, down 2.8% after it reported lower monthly sales for Portugal, Denmark and Sweden. Google-parent Alphabet also lost 1.7%.
The Institute for Supply Management's (ISM) survey showed US manufacturing contracted for a third straight month in May and suppliers took longer to deliver inputs amid tariffs, potentially signaling looming shortages of some goods.
Dallas Federal Reserve Bank President Lorie Logan said that with the labor market stable, inflation running somewhat above target and the outlook uncertain, the central bank is keeping a watchful eye on a broad range of data to judge what response might be needed, and when.
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