U.S. Stock Market Opens Higher Despite Tariff Threats

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Gold Hits Record High, Dollar Strengthens Amid Market Uncertainty / Getty Images

The U.S. stock market opened higher on Monday, defying concerns over potential economic disruptions stemming from former President Donald Trump’s newly announced tariff threats on steel and aluminum imports. As of 10 a.m. Eastern Standard Time, the S&P 500 Index had risen by 0.5%, the Nasdaq Composite Index surged over 0.9%, and the Dow Jones Industrial Average posted a 0.3% gain.

In the bond market, the yield on the 10-year Treasury note dropped by 2 basis points to settle at 4.47%, reflecting cautious investor sentiment. Meanwhile, the U.S. dollar exhibited strength against major currencies such as the Canadian dollar and the Japanese yen. The Bloomberg Dollar Spot Index climbed 0.2%, marking its highest level in a week as investors sought safe-haven assets amid mounting trade tensions.

Gold prices reached an all-time high, driven by increased demand for safe-haven investments. The precious metal surged 1.5% to $2,904.62 per troy ounce, surpassing previous records as market participants reacted to the uncertainty surrounding Trump's tariff policies.

Trump’s recent announcement includes a sweeping 25% tariff on all steel and aluminum imports. Although he did not specify the timeline for the implementation of these tariffs, he emphasized reciprocal taxation for countries imposing tariffs on U.S. goods. This news triggered a rally in U.S. steel and aluminum stocks, with Nucor Corporation jumping 7%, U.S. Steel gaining 4%, Cleveland-Cliffs skyrocketing by 13%, and Alcoa Corporation rising 4%.

In the tech sector, Nvidia continued its upward momentum, bolstered by investor confidence in robust capital expenditures on AI hardware by major tech companies. As of 10 a.m., Nvidia’s stock had climbed 3.4% to $134, extending the rebound rally that began last week.

Conversely, Tesla faced a 1.5% decline, trading at $356, amid disappointing sales figures in China and Europe, coupled with Stifel's downward revision of its target price. Despite the challenging environment, McDonald’s shares advanced 5%, as strong international sales offset domestic declines.

Cryptocurrencies also experienced significant gains, with Bitcoin rising 2.7% to $97,828.42 and Ethereum appreciating 4.4% to $2,665.10, reflecting renewed investor interest in digital assets.

Looking ahead, Federal Reserve Chair Jerome Powell is scheduled to deliver a key speech before Congress on Monday, which could provide further insights into the central bank's monetary policy outlook. Additionally, the release of the January Consumer Price Index (CPI) report on February 12 and data on weekly jobless claims and the Producer Price Index (PPI) on February 13 will be closely watched by market participants.

Earnings season remains in full swing, with 78 major companies, including Coca-Cola, Unilever, AppLovin, Starbucks, and CVS Health, set to report their quarterly results this week. These reports are expected to offer critical insights into corporate performance amid ongoing economic uncertainties.

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