U.S. Steel (X) released its earnings yesterday after markets closed. The company missed both top-line and bottom-line estimates. The stock is deep in the red, having lost 3.1% as of 10:45 AM EST. AK Steel (AKS) and Nucor (NUE) have gained 4.1 % and 1.0%, while Cleveland-Cliffs (CLF) and ArcelorMittal (MT) have lost 1.6% and 0.4%, respectively.
Last year President Trump imposed tariffs on US steel imports, which brought respite for US steel producers (SPY). However, despite the tariff protection, US steel stocks have largely sagged in the last year. On the downstream side, end users have been crying foul over higher steel prices in the United States.
Now Trump is apparently providing another round of support to steel stocks. White House trade adviser Peter Navarro told reporters that today Trump would sign an order called “Strengthening Buy American Preferences for Infrastructure Projects.” The order would “encourage recipients of new federal financial assistance awards to use, to the greatest extent practical, iron, steel, aluminum, cement and other manufacturing products produced in the United States.”
The order could be another boost for US steel stocks at a time when there are concerns over a possible stagnation in demand this year. However, US steel stocks have been out of favor with markets despite a surge in earnings. Investors have been increasingly apprehensive over the US steel price outlook amid China’s slowdown.
Read Will Trump’s Steel Tariffs Fail Like Bush’s Tariffs for a detailed analysis of Section 232 tariffs.