The American stock market closed higher on Monday, driven by Nvidia and other AI-related stocks, while steel producers surged after President Donald Trump announced additional tariffs on steel and aluminum imports. Heavy tech stocks took a hit on Friday after Trump declared reciprocal tariffs on all countries, matching the tariffs those countries have imposed. Expectations that the Federal Reserve would pause interest rate cuts in March were strengthened after a mixed US employment report on Friday. The broad S&P 500 index closed up 0.7 percent, with the tech-heavy Nasdaq and Dow Jones industrial indexes rising by 1.0 percent and 0.4 percent, respectively.
Commodities saw widespread gains yesterday. Oil prices rose on Monday after three consecutive weeks of losses, although investors still worry that Trump could initiate a trade war. According to a source familiar with the situation, Trump is expected to sign an executive order on tariffs later on Monday or Tuesday, a move that could escalate the risk of a trade war on multiple fronts. China’s retaliatory tariffs on certain US export goods took effect on Monday, with no signs of progress in negotiations between Beijing and Washington. WTI crude oil rose by 1.5 dollars to 72.5 dollars per barrel at 20:35, while Brent crude climbed by 1.3 dollars to 76.0 dollars per barrel.
Base metals generally rose yesterday. Nickel was the day’s loser, falling by 1.1 percent. Copper rose by 0.1 percent, while both lead and zinc increased by 0.4 percent. Tin rose by 0.7 percent, and the day’s winner, aluminum, advanced by 1.3 percent. Gold prices continued their strong upward trend on Monday, surpassing the crucial $2,900 level for the first time, driven by increased demand for safe-haven assets amid concerns about trade wars and inflation. The price of gold grew by 43.1 dollars to 2,903.2 dollars per ounce.
Among individual US companies, chip giant Nvidia rose by 2.9 percent, along with sector peers Broadcom and Micron, which climbed by 4.5 percent and 3.9 percent, respectively. Tesla lost 3.0 percent after the analyst firm Stifel lowered the price target for the company. McDonald’s fell short of analysts’ expectations and reported lower profit than expected for Q4.
The yield on the US ten-year Treasury bond remained unchanged at 4.50 percent.
Chinese stocks started Tuesday on a downward trend, while the Japanese market was closed for a holiday. At least six Asian economies have expressed interest in buying liquefied natural gas to reduce their trade deficits with the US and fend off tariffs, while others aim to expand and diversify their energy supply. By 07:50, the Chinese Hang Seng and Shanghai indexes had declined by 0.5 percent and 0.1 percent, respectively.
On the Stockholm Stock Exchange, various companies, such as Hanza and Stora Enso, reported results at 07:30. Stora Enso reported lower margins and operating profit than the market expected for Q4. Hanza reported an operating profit (EBITA) of 74 million kronor for Q4 2024, with net sales totaling 1,270 million kronor.
In morning recommendations, Morgan Stanley raised the target price for Tele2 to 125 kronor (from 120) and reiterated a neutral rating. Barclays raised Paradox’s target price to 160 kronor (from 155) and reiterated an underweight recommendation. DNB raised NCC’s target price to 200 kronor (from 190) and reiterated a buy recommendation.
The macro agenda for Tuesday is relatively quiet. The new loans in China for January will be announced at 11:00, followed by the annual Brazilian consumer price index for January at 13:00. At 16:00, Federal Reserve Chairman Jerome Powell will deliver a speech, and the US weekly crude oil inventories will be reported at 22:30 to close the day.