2 Steel Stocks Soaring as Trump Moves to Double Tariffs

Cleveland-Cliffs (CLF) and Steel Dynamics (STLD) shares are surging after President Trump announced plans to double steel tariffs to 50%, effective Wednesday. CLF is up 27.8%, on pace for its best day since 2016, while STLD is up 11.3%, trading at its highest level since December. Options activity for both companies has spiked, with notable interest in STLD June 135 puts and CLF June 8 calls.

Analysis

The announcement by President Donald Trump to double U.S. steel tariffs to 50%, effective Wednesday, has catalyzed a significant rally in domestic steel producers Cleveland-Cliffs Inc. (CLF) and Steel Dynamics Inc. (STLD). CLF shares surged 27.8% to $7.43, marking their best single-day percentage gain since 2016 and snapping a seven-day losing streak; this rebound occurred off a four-year low of $5.63 recorded on Friday, with the stock now testing resistance at its 20-day moving average, though it remains down 21.2% year-to-date. Simultaneously, STLD shares increased 11.3% to $136.89, reaching their highest level since December, pacing for its best day since November, and according to the article, earlier gapped above overhead pressure at the $40 region which had capped rallies in February and May. The article also states that for 2025, STLD shares now sport a healthy 20.1% lead. This policy shift has triggered a surge in options market activity for both companies, with CLF's volume running at 11 times its intraday average and STLD's at 5 times. Notably, the most active contract for STLD is the June 135 put, where positions are reportedly being sold to open, while for CLF, it is the June 8 call. The strongly positive sentiment scores for the event (0.75 overall, 0.95 for CLF, 0.9 for STLD) and a high market impact score (0.7) underscore the perceived immediate benefits for these firms, despite the move contributing to broader global trade tensions.

Key Decisions for Investors

• Investors should recognize the substantial positive impact of the new 50% steel tariffs on CLF and STLD, but remain cautious about the sustainability of such policy-driven rallies and monitor for ongoing volatility.
• For CLF, the critical test of the 20-day moving average following a bounce from a four-year low warrants close observation, especially given its significant year-to-date decline prior to this event, to ascertain if a genuine trend reversal is underway.
• The pronounced increase in options volume, specifically the selling of STLD June 135 puts and active trading in CLF June 8 calls, signals heightened speculative interest and could offer insights into near-term market expectations and potential support or resistance levels.
• It is prudent to consider the broader geopolitical implications of escalating trade tensions, as these tariffs, while directly benefiting domestic steel producers, could introduce wider market instability or trigger retaliatory measures affecting other investments.