Shares of prominent aluminum and steel companies were on the rise in premarket trading Monday following President Donald Trump's announcement of plans to impose a 25% tariff on imports of the metals into the United States. Alcoa Corp (NYSE:AA) saw its stock climb 5%, while Century Aluminum Co (NASDAQ:CENX) experienced a jump of 6%.
The steel sector also showed significant gains, with Cleveland-Cliffs Inc (NYSE:CLF) soaring by 8%, U.S. Steel Corp (NYSE:X) also up by 5%, Steel Dynamics Inc (NASDAQ:STLD) increasing by 7%, Nucor Corp (NYSE:NUE) rising by 9%, and Commercial Metals Company (NYSE:CMC) advancing in the market.
The driver behind this upward movement is Trump's recent trade policy decision, announced on Sunday, to introduce new tariffs on steel and aluminum imports on top of existing duties. This news has been perceived as beneficial for domestic producers, as it could potentially reduce foreign competition and increase prices for their products.
In addition to the tariff announcement, U.S. Steel's premarket surge came after a statement from Japan's chief cabinet secretary indicating that Nippon Steel might propose a significant change in its plan to buy the American company. This development has added to the positive sentiment around U.S. Steel and the industry as a whole.
President Trump also mentioned that he would reveal reciprocal tariffs targeting all countries by Tuesday or Wednesday, intending to match the tariffs imposed by each country on U.S. goods.
The market's reaction to these announcements reflects the expectation that tariffs could provide a competitive edge to domestic metal producers by increasing costs for foreign competitors. However, investors will be watching closely for further developments, particularly the details of the reciprocal tariffs and any potential retaliatory measures from trading partners.
