Stock Movers: US Steel, Bristol Myers, Tesla (Podcast)

US Steel (X) shares declined following President Trump's threat to raise steel and aluminum tariffs to 50%, while competitor Cleveland Cliffs (CLF) moved higher on the same news. Bristol Myers (BMY) is trading up after agreeing to license a cancer drug from BioNTech SE for up to $11.1 billion. Tesla (TSLA) shares are down amid a broader tech sector decline and reports of falling new-vehicle registrations in France.

Analysis

The US steel sector is exhibiting divergent stock performance following President Trump's announcement of a potential increase in steel and aluminum tariffs to 50% from the current 25%. United States Steel Corporation (X) shares weakened despite the President's visit to a plant and his championing of an expected deal with Japan's Nippon Steel Corp., which reportedly includes a $5,000 bonus for US Steel workers and a $2.2 billion investment to increase steel production with the aim of keeping the firm US-owned. Conversely, competitor Cleveland-Cliffs Inc. (CLF) saw its shares rise on the tariff news, suggesting market perception of a more favorable impact for domestically-focused producers. In the pharmaceutical sector, Bristol Myers Squibb (BMY) shares advanced, in line with the broader pharma sector, after agreeing to license a next-generation cancer drug from BioNTech SE. This strategic deal involves an upfront payment of $1.5 billion, $2 billion in installments through 2028, and a total potential value of up to $11.1 billion, marking a significant investment for BMY and a substantial return for BioNTech, which acquired the compound from Biotheus. Meanwhile, Tesla (TSLA) shares experienced a downturn, mirroring a broader decline in the technology sector, and exacerbated by reports of a further fall in new-vehicle registrations in France, which challenges CEO Elon Musk’s recent assertions of a sales recovery from an early-year slump.

Key Decisions for Investors

• Investors should closely monitor the finalization and specific details of the proposed 50% steel and aluminum tariffs, as this policy could significantly impact the earnings outlook and competitive positioning of US Steel (X) and Cleveland-Cliffs (CLF), and also track developments in the US Steel-Nippon Steel deal amidst this regulatory uncertainty.
• For Bristol Myers Squibb (BMY), the $11.1 billion licensing deal for BioNTech's cancer drug represents a significant capital allocation towards its oncology pipeline; investors should assess the long-term revenue accretion potential against the upfront costs of $1.5 billion and future milestone payments, considering the typical timelines and risks in drug development.
• The reported decline in Tesla's (TSLA) new-vehicle registrations in France warrants careful observation as a potential indicator of European market demand trends; investors should scrutinize upcoming global sales data and broader EV market conditions to gauge the strength of Tesla's asserted sales recovery, especially given the concurrent tech sector downturn.