US Steel, Nucor, Steel Dynamics Expected To Benefit As Trump Formalizes Tariffs, Says Morgan Stanley: Retail Sentiment Soars

Analysts at Morgan Stanley underscored their bullish outlook for the industry after the Trump administration formalized tariffs on steel and aluminum imports.

Shares of United States Steel Corp. (X), Nucor Corp. (NUE), Steel Dynamics Inc. (STLD), and other steelmakers edged up in mid-day trade on Tuesday as analysts at Morgan Stanley underscored their bullish outlook for the industry after the Trump administration formalized tariffs on steel and aluminum imports.

U.S. Steel stock was up 1.3% at the time of writing, Nucor gained over 0.6%, while Steel Dynamics stock gained 1.6%.

President Donald Trump signed an executive order on Monday, raising tariffs on steel and aluminum imports in the U.S. to a flat 25%, from a previous rate of 10%.

Trump’s order also eliminates exceptions for countries with whom the U.S. has trade deals, impacting imports from Canada, Mexico, South Korea, Brazil, and others.

“It's 25% without exceptions or exemptions. That's all countries, no matter where it comes from, all countries,” Trump told reporters during a press conference, according to a Reuters report.

Morgan Stanley analysts noted that companies like Alcoa Corp. (AA) also stand to benefit from this tariff since it has a smelting business in the country.

“In steel, we expect higher domestic prices, however, low capacity utilization rates and growing steelmaking capacity could keep a lid on price gains,” Morgan Stanley said in its note.

It observed that U.S. Steel, Nucor, Steel Dynamics, Cleveland-Cliffs Inc. (CLF), Commercial Metals Co., and Gerdau SA also stand to benefit.

In the meantime, the European Commission has vowed “countermeasures” to Trump’s tariffs.

Retail sentiment on Stocktwits around U.S. Steel stock hovered in the ‘extremely bullish’ (89/100) territory.

U.S. Steel’s share price has gained more than 15% year-to-date, but it has fallen over 14% in the past year.

Retail users were similarly optimistic about the Nucor stock, hovering in the ‘extremely bullish’ (92/100) territory.

Nucor’s stock has gained over 18% year-to-date, while it has declined over 25% in the past year.

Sentiment around the Steel Dynamics stock was even higher, at (94/100) at the time of writing.

Steel Dynamics’ stock has surged over 18% year-to-date, and a little over 9% in the past year.

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