Quick overview

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Wall Street’s three main indexes posted modest gains on Monday as investors digested renewed trade tensions between the U.S. and China, including tariff threats, while clinging to hopes of diplomatic resolution.

U.S. Treasury Secretary Scott Bessent said President Donald Trump is expected to speak soon with his Chinese counterpart, Xi Jinping, in an effort to ease friction over critical minerals. This announcement helped support the market, allowing major indexes to end the session with slight advances as traders awaited further clarity.

The Dow Jones Industrial Average, composed of 30 blue-chip stocks, rose 0.08% to 42,305.48 points. The S&P 500, which tracks the most valuable U.S. companies, gained 0.41% to 5,935.94, while the tech-heavy Nasdaq Composite climbed 0.67% to 19,242.61.

On Friday, Trump announced plans to double tariffs on steel and aluminum imports from 25% to 50%, just hours after accusing China of violating a trade agreement to reduce tariffs and restrictions on critical minerals.

Steel Stocks Surge

Shares of steelmakers rallied sharply at the close. Steel Dynamics and Nucor each gained 10%, while Cleveland-Cliffs soared 23%. Within the Dow Jones, Boeing stood out with a 2.00% gain, followed by IBM, which rose 1.87%.

Cautious Fed Tone Amid Rate Cut Expectations

Federal Reserve Chair Jerome Powell spoke Monday at the 75th Anniversary Conference of the Fed’s Division of International Finance but did not offer any new insights on monetary policy.

Meanwhile, Fed Governor Christopher Waller maintained that interest rate cuts could still happen this year, noting that recent data support this outlook. Speaking at a conference in South Korea, Waller said the inflationary impact of Trump’s new tariffs is unlikely to be persistent, which could give the Fed more confidence to lower rates later this year.

“If core inflation continues to move toward our 2% target,” and if tariffs settle at lower levels while employment remains strong, “that would support what I consider good news: rate cuts by year-end,” Waller said.

Chip Stocks Rebound Despite Tech Sanction Concerns

In corporate news, semiconductor stocks like Nvidia (+2%), Marvell Technology (+2.3%), and Taiwan Semiconductor Manufacturing (+1%) pared earlier losses, despite reports that the Biden administration is preparing to tighten restrictions on Chinese tech firms.

According to a Bloomberg report published Friday, a proposed regulation would require U.S. government licenses for transactions involving any company that is majority-owned by a sanctioned entity. This move would effectively broaden existing export rules to include subsidiaries, further constraining China’s access to critical technology.