U.S. Stocks Rebounding Despite Trump’s Latest Tariff Threats

Following the sharp pullback seen during last Friday’s session, stocks have moved back to the upside during trading on Monday. The major averages have all rebounded, with the tech-heavy Nasdaq showing a particularly strong upward move.

In recent trading, the Nasdaq and S&P 500 have reached new highs for the session. The Nasdaq is up 230.18 points or 1.2 percent at 19,735.58, the S&P 500 is up 41.51 points or 0.7 percent at 6,067.50 and the Dow is up 175.11 points or 0.4 percent at 44,478.51.

The rebound on Wall Street may partly reflect bargain hunting, as traders pick up stocks at somewhat reduced levels following the sharp pullback seen last Friday.

While Friday’s slump partly reflected new tariff threats from President Donald Trump, traders have largely shrugged off his latest threat to impose a 25 percent tariff on all steel and aluminum imports into the U.S.

The latest tariff threat comes after Trump said last Friday he plans to announce reciprocal tariffs on many countries this week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.

Meanwhile, amid a light day on the U.S. economic front, traders are also looking ahead to the release of several key reports in the coming days.

Reports on consumer and producer inflation are likely to be in focus, while reports on retail sales and industrial production may also attract attention.

Traders are also likely to keep a close eye on congressional testimony by Federal Reserve Chair Jerome Powell, looking for clues about the outlook for interest rates.

Sector News

Gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.9 percent to its best intraday level in well over three months.

The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for April delivery soaring $47.70 to $2,935.30 an ounce.

Steel stocks are also seeing significant strength in reaction to Trump’s tariff threat, resulting in a 2.7 percent surge by the NYSE Arca Steel Index.

Computer hardware, oil producer and telecom stocks have also shown strong moves to the upside, while notable weakness is visible among banking, airline and biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Hong Kong’s Hang Seng Index jumped by 1.8 percent and China’s Shanghai Composite Index climbed by 0.6 percent, while Australia’s S&P/ASX 200 Index fell by 0.3 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.9 percent, the German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.3 percent.

In the bond market, treasuries have moved modestly higher following the pullback seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 4.469 percent.