US Stocks Rebound as Investors Shrug Off Trump’s Tariff Threats
US stocks bounced back on Monday, defying President Trump’s latest tariff threats, including new levies on steel and aluminum imports. The Dow Jones Industrial Average (^DJI) climbed nearly 0.4%, rebounding from its worst weekly loss in almost a month. The S&P 500 (^GSPC) rose about 0.6%, while the Nasdaq Composite (^IXIC) surged close to 1%, driven by strong performance in tech stocks, including a 3% gain for AI chip giant Nvidia (NVDA). Investors appeared unfazed by Trump’s pledge to impose additional 25% tariffs on steel and aluminum imports from all countries, with the official announcement expected on Monday. While the new tariffs are likely to benefit US steel companies—shares of Cleveland-Cliffs (CLF), Nucor (NUE), US Steel (X), and aluminum producer Alcoa (AA) all jumped—markets seem to be growing accustomed to Trump’s trade-related announcements. Some analysts on Wall Street even view these moves as negotiation tactics rather than a sign of an escalating trade war.
Energy and Tech Stocks Lead the Charge as Markets Brush Off Trade Tensions
Monday’s gains were led by energy and technology stocks, with the S&P 500 Energy Sector (XLE) outperforming the broader market. The rally in energy stocks was supported by a rebound in oil prices, which had declined over the past three weeks. West Texas Intermediate crude (CL=F) and Brent futures (BZ=F) both gained over 1%, drawing buyers back into the market. Meanwhile, tech stocks continued to shine, with semiconductor stocks like Nvidia (NVDA) driving the Nasdaq Composite’s gains. However, not all tech stocks are thriving. The "Magnificent Seven" trade—a group of big-cap tech stocks including Meta (META), Amazon (AMZN), Google (GOOG), Apple (AAPL), Microsoft (MSFT), and Tesla (TSLA)—has struggled so far in 2025, with only Meta and Amazon showing positive returns. Despite this, Wall Street remains bullish on Nvidia, with analysts reiterating their buy ratings ahead of the company’s earnings report later this month.
Corporate Earnings and Inflation Data Take Center Stage
This week is shaping up to be a big one for corporate earnings, with 78 S&P 500 companies set to report their results. McDonald’s (MCD) kicked things off on a positive note, with its shares rising after the company reported better-than-expected same-store sales growth. Coca-Cola (KO), Super Micro Computer (SMCI), and Airbnb (ABNB) are also scheduled to report this week. Meanwhile, investors are keeping a close eye on inflation data. The January Consumer Price Index (CPI) reading, set to be released on Wednesday, will provide critical insights into whether the recent tariff hikes are driving up prices. The New York Fed’s latest survey revealed that consumers’ long-term inflation expectations ticked higher to 3%, the highest level since May 2024. Year-ahead commodity price expectations also rose, with gas prices, food, medical care, college tuition, and rent all seeing increases. These findings align with last week’s University of Michigan consumer sentiment survey, which showed a decline in sentiment driven by inflation concerns.
Rivian and GameStop Make Headlines with Strategic Moves
In other corporate news, Rivian (RIVN) announced that it is opening up orders for its Rivian Commercial van beyond its initial launch partners, potentially creating a lucrative new revenue stream for the electric vehicle maker. Rivian’s commercial van, which runs on the same platform as the delivery vans it produces for Amazon (AMZN), has been tested with large fleet operators like AT&T. The move comes after Amazon, which initially ordered 100,000 vans, has so far only utilized 20,000. Rivian’s shares rose over 3% on the news. Elsewhere, GameStop (GME) stock surged after Ryan Cohen, the company’s chairman, was spotted with Michael Saylor, the CEO of MicroStrategy and a prominent advocate for corporate bitcoin holdings. The photo sparked speculation that GameStop might follow Saylor’s playbook and invest some of its $4.6 billion in cash reserves into bitcoin. GameStop’s stock jumped as much as 7% in early trading on Monday.
Gold Rallies to New Heights Amid Safe-Haven Demand
President Trump’s latest tariff threats also spurred a rally in gold, a traditional safe-haven asset. Gold futures (GC=F) climbed over 1.4% on Monday, surpassing $2,900 per ounce for the first time on record. The precious metal has gained nearly 10% so far this year, building on a 27% rally in 2024. Analysts expect gold to continue benefiting from the growing uncertainty surrounding US trade policy, with Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, recommending a 5% allocation to gold in a balanced portfolio. The rally in gold reflects broader concerns about the potential economic impact of Trump’s tariffs, including the risk of stagflation—a combination of slow growth and high inflation—that some economists warn could result from a full-scale trade war.
Trump’s Trade Policy Overhaul Continues to Dominate Markets
Donald Trump’s rapid reorientation of US trade policy has left markets on edge, with the president simultaneously pursuing three major trade initiatives this week. In addition to the new steel and aluminum tariffs, Trump is expected to announce retaliatory tariffs on all trading partners that match the duties levied on US goods. The uncertainty surrounding these moves has left importers, CEOs, and foreign leaders scrambling to adjust. While some analysts view Trump’s aggressive trade tactics as a negotiating strategy, others warn that the growing list of tariff hikes could have painful economic consequences. Torsten Sløk, chief economist at Apollo Global Management, cautioned that a full-scale trade war could deliver a "stagflationary shock" to the US economy. With the January CPI reading and retail sales data also on deck this week, markets will be closely watching for signs of how these policies are impacting the economy.
