US stocks edged higher on Monday despite renewed trade tensions between the United States and China. The Dow Jones Industrial Average closed up 35 points, while the S&P 500 gained 0.41% and the tech-heavy Nasdaq Composite rose 0.67%. The modest gains came as investors digested President Donald Trump’s decision to double tariffs on steel and aluminum imports.
The move has raised concerns about a potential global trade war. The US dollar weakened broadly on Monday amid the tariff uncertainty. The dollar index, which measures the greenback against six major currencies, fell 0.65%.
Treasury yields rose as investors sold bonds. Trump claimed that China had violated a trade truce agreed last month. Beijing accused the US of “provoking new economic and trade frictions” in response.
The president also announced plans to set tariffs on US steel imports at 50%, doubling the current rate.
Stocks edge higher amid trade tensions
The higher levy is set to take effect on Wednesday.
Shares of automakers fell on Monday as the tariffs are expected to raise the cost of importing steel and aluminum. Ford dropped 3.85%, while Stellantis slid 3.55% and General Motors lost 3.87%. On the other hand, US steelmakers saw their shares jump.
Cleveland-Cliffs surged around 23%, and Nucor and Steel Dynamics each gained about 10%. The European Union has vowed to retaliate unless a “mutually acceptable solution” is reached with Washington. Without an accord, EU counter measures will automatically take effect on July 14 or earlier if needed.
Oil prices surged on Monday after Ukraine conducted a large-scale drone attack on Russian air bases. WTI crude gained 2.85% to $62.52 a barrel, while Brent crude rose 2.95% to $64.63 a barrel. The oil price increase came despite OPEC+ announcing it would boost oil supply for the third consecutive month.
Increased supply typically causes prices to fall, but the move was largely expected by the market.