U.S. Steel Stock Approaches Key Resistance Levels Amid Tariff Surge and Bullish Momentum

Economic

Commodity

Summary:

As President Trump announces a plan to double steel tariffs to 50%, U.S. Steel (X) shares continue their upward rally, breaking out of a symmetrical triangle pattern. Technical indicators suggest a potential upside toward $59.75...

Tariff Policy Fuels Momentum in U.S. Steel Shares

Following President Donald Trump's announcement on May 31 to double steel and aluminum import tariffs from 25% to 50%, shares of U.S. Steel have come under intensified market attention. The policy—framed as a means to strengthen the domestic steel sector and reduce reliance on foreign imports—was delivered at a Pennsylvania rally, the symbolic epicenter of U.S. industrial policy rhetoric.

The timing coincides with Trump's recent endorsement of a $14.1 billion merger between U.S. Steel and Japan’s Nippon Steel, which had previously been stalled under national security scrutiny by the Biden administration. The convergence of policy support and regulatory shifts has helped drive a 33% surge in U.S. Steel’s stock over the past two weeks—bringing its year-to-date gain to nearly 60%.

Breakout from Symmetrical Triangle Suggests Technical Strength

From a technical analysis perspective, the stock recently completed a breakout from a symmetrical triangle pattern. This consolidation pattern formed after a bullish golden cross in late March, when the 50-day moving average (MA) crossed above the 200-day MA—a classic indicator of long-term upward momentum.

The breakout has been accompanied by a surge in trading volume and a spike in the relative strength index (RSI) into overbought territory. This combination of strong price action and volume suggests that market conviction behind the rally is robust, rather than speculative.

Upside Target Based on Measured Move

Traders applying the "measured move" principle—a method where the height of the prior trend is added to the breakout point—have calculated a target price of $59.75. This is derived by adding a $16 price move (the height of the preceding trend) to the breakout level near $43.75.

With the stock closing significantly below this target as of Friday, the path to $59.75 represents an additional 11% upside—provided momentum is sustained and no policy headwinds reverse sentiment.

Critical Support Zones to Watch During Pullbacks

Investors should also monitor for potential retracements, particularly in the face of profit-taking or broader market corrections.

The $46 level represents the nearest support, aligning with the upper boundary of the former triangle and a February 2024 trough. A dip to this zone may offer a healthy reset if volume stabilizes and RSI normalizes.

If the stock breaks below $46, a second support emerges near $43, where the 50-day MA intersects with prior resistance turned support from April 2024. This zone could serve as a pivot level during deeper retracements.

In the event of a more pronounced correction, $36 marks a major long-term support level, connecting multiple troughs between late 2023 and early 2024. This would represent a 25% drop from current levels and may attract long-term investors seeking value at structurally important levels.

U.S. Steel's technical setup reflects a bullish market sentiment reinforced by protectionist trade policy and strategic M&A developments. As the company benefits from political tailwinds and heightened investor interest, the stock is moving toward a projected technical ceiling of $59.75. However, with RSI stretched and macroeconomic volatility rising, investors should remain alert to short-term pullbacks and monitor support levels at $46, $43, and $36. The interaction between tariff escalation and investor positioning will be crucial in determining whether U.S. Steel sustains its bullish trajectory or consolidates near its recent gains.

Source: Investopia

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Economic

Commodity

OPEC+ Decision Offers Market Reassurance

Brent crude climbed 1.9% to $63.97 per barrel while WTI gained 2.14% to $62.09 early Monday, recovering from last week’s losses. The rebound follows OPEC+’s decision on Saturday to maintain its incremental production increase of 411,000 barrels per day (bpd) into July—matching hikes in May and June and in line with market expectations.

The decision soothed concerns of a larger-than-expected supply boost, which could have significantly pressured prices. Market participants had speculated that the alliance, led by Saudi Arabia and Russia, might increase output more aggressively to discipline over-producing members and regain market share. However, by adhering to its existing trajectory, OPEC+ signaled its intent to balance market discipline with price stability.

Market Reaction Validates Expectations

Analysts emphasized that the outcome had been priced in, preventing a disruptive open in Monday trading. Harry Tchilinguirian from Onyx Capital Group noted that a surprise hike would have triggered sharper sell-offs. Instead, the restrained move stabilized sentiment, offering oil bulls near-term relief.

The measured supply increase also indicates OPEC+’s ongoing sensitivity to global demand signals, inflationary pressures, and growing scrutiny over energy affordability—particularly in developing economies.

U.S. Demand and Supply Dynamics in Focus

Attention now shifts to the U.S., where key supply indicators are showing signs of tightening. Last week saw a significant jump in implied gasoline demand—rising by nearly 1 million bpd—marking the third-largest weekly increase in three years. This spike coincides with the traditional start of the U.S. driving season, hinting at a seasonal demand uplift that could further support crude prices.

At the same time, U.S. production may be facing short-term headwinds. Despite hitting a record high of 13.49 million bpd in March, the number of operational oil rigs has declined for five consecutive weeks, falling to 461—the lowest since November 2021, according to Baker Hughes. The decline suggests cost pressures and price fluctuations are prompting a reassessment of drilling activity.

Risks Ahead: Hurricane Season and Inventory Levels

Another emerging factor is the approaching Atlantic hurricane season, forecast to be more active than usual. With U.S. fuel inventories already at relatively low levels, any disruption to Gulf Coast refining or production infrastructure could amplify supply risks and elevate prices in the coming months.

These converging factors—seasonal demand, potential weather-related disruptions, and cautious supply growth—are likely to maintain upward pressure on oil in the near term. However, sustained gains will depend on broader macroeconomic sentiment and any unexpected developments in U.S. trade or fiscal policy that could shift investor appetite toward or away from commodities.

By sticking to a predictable output path, OPEC+ has provided oil markets with a degree of clarity at a time of geopolitical and economic turbulence. With U.S. demand rebounding and production signals turning more mixed, the current balance between output and consumption may help oil prices stabilize in the short run. However, the next phase of price action will depend heavily on external factors—from hurricane season to policy shifts—that could redefine supply-demand dynamics later this summer.

Source: Reuters

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Forex

Tariff Volatility Undermines Dollar Stability

The U.S. dollar index fell 0.2% to 99.21 on Monday as traders reassessed the implications of escalating trade policies under President Donald Trump. Following his announcement late Friday to double tariffs on imported steel and aluminum to 50% starting June 4, the greenback pulled back across major currency pairs. This comes amid an extended period of volatility tied to fluctuating tariff rhetoric and legal uncertainty over the president’s trade authority.

Trump’s tariffs have repeatedly acted as a double-edged sword for the dollar. While protectionist policies may offer domestic industrial support, they also raise recession fears and stoke inflationary risks, prompting capital outflows from U.S. assets. After a modest 0.3% gain last week—largely supported by a U.S. trade court initially blocking Trump’s tariffs—this week began with renewed selling pressure as an appeals court reinstated the duties pending further judicial review.

Currency Reactions Reflect Risk Rotation

The dollar dropped 0.3% against the Japanese yen to 143.57 and lost ground to most G10 currencies. The euro rose to $1.1372 and the British pound climbed to $1.3489. The Australian dollar added 0.3% to $0.6454, reflecting a mild increase in commodity sentiment and global risk appetite.

In broader terms, recent dollar softness also coincides with ongoing investor rotation away from U.S. assets—a trend supported by the “Sell America” narrative that has affected both stocks and Treasuries. With U.S. Treasury yields rising in the face of mounting fiscal deficits, the premium demanded by fixed-income investors has grown, particularly in the 30-year maturity range, which is nearing the 5% threshold.

Fiscal Outlook and Section 899 Create Additional Drag

Market concern over the U.S. fiscal trajectory is intensifying as the Senate begins deliberations on a tax-and-spending bill that would add $3.8 trillion to an already record-high $36.2 trillion federal debt over the next decade. Of particular note is Section 899, a proposed provision allowing the U.S. to tax foreign investors from jurisdictions deemed to impose “unfair” tax policies. Analysts at Barclays warned this could function as an indirect tax on the U.S. capital account, discouraging foreign inflows and weakening the dollar further.

This proposal introduces a structural risk to international investment sentiment and could diminish the appeal of U.S. financial assets at a time when the Treasury relies heavily on global demand for debt financing.

Policy Uncertainty Curbs Dollar Upside Despite Rate Advantage

Despite high U.S. interest rates—currently much stronger than those in Europe and Canada—the dollar has underperformed. As noted by Capital Economics, the greenback remains “considerably weaker than interest rate differentials would imply,” highlighting the dominant role of sentiment and political risk in FX markets.

Markets expect the Federal Reserve to hold off on interest rate cuts in the short term, with a 75% probability of easing priced in for September. This week, investors will monitor speeches from at least 11 Fed officials—including Chair Jerome Powell—for any shift in tone. While Fed Governor Christopher Waller acknowledged possible cuts later this year due to downside risks from tariffs, inflation risks remain persistent.

Market Outlook Hinges on Data and Political Follow-Through

Investor focus now turns to the upcoming U.S. jobs report, with expectations for a payroll increase of 130,000 in May and unemployment steady at 4.2%. A weaker-than-expected reading could offer relief to the bond market and further fuel dollar weakness by raising expectations of Fed easing.

Meanwhile, the European Central Bank is widely expected to cut rates by 25 basis points to 2.0% on Thursday. With the euro gaining traction and the ECB likely to signal further dovish moves, the transatlantic interest rate spread could begin to narrow, adding further headwinds to the U.S. dollar.

In contrast, the Canadian dollar gained 0.1% to 1.3727 per USD despite Trump’s steel tariff threats, as markets believe the Bank of Canada will hold rates steady while acknowledging tariff-related downside risks.

The U.S. dollar’s recent slide underscores how trade uncertainty, fiscal instability, and capital flow concerns are overpowering traditional rate-based FX dynamics. As investors brace for further tariff announcements and critical economic data, the dollar appears increasingly vulnerable to sentiment shocks. Should the political narrative fail to stabilize or the Fed hint at upcoming rate cuts, the dollar’s current support may erode further, prompting deeper shifts toward non-U.S. assets in the second half of the year.

Source: Reuters

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China–U.S. Trade War

Tariff Uncertainty Triggers Portfolio Realignment

The intensifying trade tariff environment under U.S. President Donald Trump has led to a profound recalibration in global investment behavior, particularly within Asia. As U.S. courts deliberate the legality of Trump’s tariff regime, investors are already hedging against prolonged geopolitical friction by shifting capital away from dollar-denominated assets and toward regional alternatives.

Claire Huang, Senior Macro Strategist at Amundi, emphasized that the market is witnessing a significant pivot from the long-standing belief in U.S. market primacy. Capital is increasingly flowing toward Europe and Asia—especially Japan and emerging markets—amid concerns over tariff-related disruptions and the diminished relative appeal of U.S. assets.

Strengthening Asian Currencies Signal Sentiment Shift

This capital rotation is closely tied to currency movements. The weakening of the U.S. dollar, compounded by capital outflows and ongoing legal uncertainty surrounding tariffs, has allowed many Asian currencies to recover sharply—marking a stark reversal from last year when central banks were forced to intervene to stabilize their currencies.

According to data from QUICK, major Asian currencies such as the Japanese yen (+9%), South Korean won (+7%), and Singapore dollar (+6%) have all appreciated against the U.S. dollar. In contrast, the Indonesian rupiah, Vietnamese đồng, and Hong Kong dollar have remained relatively flat.

China’s renminbi has also risen modestly (+1.6% YTD), defying earlier fears of devaluation as Beijing prioritizes geopolitical credibility and engagement with the Global South over currency manipulation. Analysts from BofA expect moderate depreciation of the yuan to 7.5 per dollar in the near term, before stabilizing at 7.3 in the second half of 2025.

The appreciation of Asian currencies reveals a shift in capital confidence, closely associated with perceived macro stability and relative insulation from U.S. domestic policy unpredictability.

Investor Behavior Points to Flight from U.S. Exposure

Fund flows further underscore this shift. According to TD Securities, U.S. investment funds saw net outflows of $5.1 billion in the week ending May 28—more than double the previous week. In contrast, Chinese investment funds attracted $1.1 billion in net inflows, accounting for nearly half of all inflows into emerging markets during that period.

This reallocation trend is not purely reactive but reflects a growing structural divergence. Investors are increasingly cautious about exposure to U.S. assets amid rising tariffs, fiscal uncertainty, and the politicization of trade. Risk aversion is pushing portfolios toward diversification outside the U.S. market.

Equity Strategies Adjust to New Trade Landscape

Investors like Jean-Charles Poullaouec are cutting equity exposure in Asia from overweight to neutral, reflecting concerns that the region—initially the main target of U.S. retaliatory tariffs—is not yet shielded from policy shocks. Though the threat of tariffs has slightly eased under a 90-day truce, the absence of a permanent resolution keeps risks elevated.

Still, China remains a focal point for short-term equity allocations, driven by speculative interest and hopes for government stimulus. However, investors remain cautious, particularly due to the dominance of retail sentiment in Chinese markets and the absence of clear fiscal signals.

Amundi, while adopting a defensive posture in China, is increasing exposure to Indian equities due to a recent recovery from technical lows. The French asset manager is also reducing its exposure to East Asian stocks, especially in the semiconductor sector, which remains vulnerable to U.S. protectionist targeting—particularly in South Korea.

This reshuffling shows a selective repositioning based on sectoral resilience and domestic demand exposure. Amundi favors high-dividend, domestic-facing Chinese stocks as a hedge against macro weakness.

Structural Concerns Cloud China’s Long-Term Outlook

Despite technological advancements, Amundi expresses skepticism about China’s long-term competitiveness, primarily due to persistent deflationary pressure and weak domestic consumption. Huang warned that any signs of economic stabilization in China tend to be quickly disrupted by new tariff shocks. Without structural demand stimulation, China’s tech sector may struggle to sustain a competitive edge.

This observation reflects a broader pattern: while policy shifts may temporarily buffer market sentiment, sustainable investor confidence hinges on real economic growth and profitability—particularly in technology-driven sectors where margins are sensitive to both global demand and local policy stability.

The global tariff conflict, spearheaded by the U.S., is reshaping the landscape of international capital allocation. Asian markets are emerging as favored destinations, bolstered by stronger currencies, relatively accommodative monetary policies, and the search for yield outside dollar-centric systems. However, the durability of this trend will depend on Asia’s ability to convert investor optimism into structural economic gains. As the U.S. trade narrative remains fluid, asset managers will continue to rebalance portfolios in search of stability, liquidity, and long-term growth potential in an increasingly fragmented financial order.

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China–U.S. Trade War

Economic

Tariff Costs Cascade Down Supply Chains

Facing rising costs from new U.S. trade tariffs, American retail giants such as Walmart, Target, Nike, Puma, and Adidas are intensifying pressure on their Chinese and Southeast Asian suppliers to absorb between 50% and 66% of added import duties. This marks a sharp shift from April, when many of these companies had temporarily accepted full responsibility for tariff-related costs to avoid supply disruption.

Now, with the current U.S.-China tariff truce set to expire in August, these corporations are renegotiating their contracts to shift financial burdens. A Zhejiang-based office supply manufacturer reported that it is currently in contingency talks with U.S. partners but is only able to absorb about 30% of the added cost—well below the newly demanded threshold.

Although both the U.S. and China have temporarily reduced tariffs (down to 30% and 10% respectively), any failure to reach a renewed agreement could reignite punitive rates, raising the likelihood of further supply chain disruptions.

Asian Suppliers Struggle to Adapt

For many original equipment manufacturers (OEMs) producing for global brands, pivoting away from export-heavy business models is not viable. Domestic market reallocation offers limited relief, especially for firms heavily dependent on U.S. consumer demand. Several Chinese and Southeast Asian suppliers are now cutting production or shifting supply toward non-U.S. markets to hedge against continued volatility.

This adjustment reflects a sequential relationship between trade policy shifts and supply chain restructuring. The rising tariff environment triggers cost reallocation from retailers to producers, leading to operational downsizing and supply reconfiguration among suppliers.

Retailers Navigate Domestic Constraints

At home, U.S. retailers are caught between mounting cost pressures and political resistance to price increases. Walmart CEO Doug McMillon acknowledged that price hikes on select items are inevitable, while Nike has publicly confirmed plans to raise retail prices. Puma has already begun rerouting part of its supply chain from China to other Southeast Asian countries. Adidas remains undecided, though internal sources suggest price increases are on the table.

The strategic response from these companies indicates that retail pricing in the U.S. is no longer immune to the global cost ripple effects of protectionist trade policies.

Trump’s Steel Tariff Doubling Reinforces Protectionist Stance

In a May 31 announcement at US Steel’s Irvin Works plant in Pennsylvania, President Trump confirmed plans to double the tariff on imported steel from 25% to 50%. Positioning this move as a safeguard for American industry, Trump linked the policy to the strategic partnership between U.S. Steel and Japan’s Nippon Steel.

Since returning to the presidency in January 2025, Trump has intensified tariff applications across allies and competitors alike, targeting steel, aluminum, and automobiles with a 25% base tariff rate. His administration argues that these protectionist measures are essential to restore domestic manufacturing competitiveness.

The policy design and timing suggest an intentional use of trade restrictions as both an economic and political lever—particularly in battleground states key to electoral success. The sequential policy logic appears to prioritize short-term domestic gains over long-term global trade stability.

Vietnamese Steel Firms Unfazed—for Now

Despite the global implications of the tariff hike, major Vietnamese steel producers report minimal disruption. According to Hòa Phát Group, exports constitute only about 20% of its output, with domestic demand absorbing the majority. The company exports to over 40 countries, which cushions against exposure to any single market.

Similarly, Hoa Sen Group stated that its U.S.-bound coated steel exports had already ceased in September 2024 due to anti-dumping and countervailing duty investigations initiated by the U.S. Department of Commerce. Given this preemptive suspension and diversified market orientation, the new U.S. steel tariff has no immediate effect on the company’s operations.

These cases highlight how diversified market strategies and early adjustments can insulate firms from volatile trade policy environments. In this instance, Vietnamese firms are responding to policy-based market risk with geographical revenue flexibility, rather than product-based dependency.

As global trade tensions escalate under a renewed wave of U.S. protectionism, American corporations are transferring financial pressures down their supply chains while suppliers in Asia scramble to adapt. The move to double steel import tariffs underscores the Trump administration’s commitment to tariff-based industrial policy, regardless of international backlash. For countries like Vietnam, early diversification and exposure management have shielded key sectors from the immediate fallout. However, the evolving trade landscape suggests that even well-insulated economies must remain agile to navigate the ripple effects of major policy swings.

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[Quick Facts]

1. Russia and Ukraine will hold a second round of talks in Istanbul on June 2

2. Trump adviser defends tariffs in legal dispute, insists they "are not going away"

3. Hungarian Prime Minister: Russia and Ukraine find it difficult to reach agreement on ceasefire

4. Waller: Interest rate cuts remain possible later this year

5. The South Korean presidential election is set to commence with a "5-to-1" voting scenario. Four former presidents are actively campaigning in support of their respective candidates

[News Details]

Russia and Ukraine will hold a second round of talks in Istanbul on June 2

On June 1, the Turkish Presidential Office announced that Russia and Ukraine would convene for a second round of direct negotiations in Istanbul, a city in western Turkey, on June 2. According to the Turkish Presidential Office, the two parties will engage in direct talks on June 2 in Istanbul to seek a peaceful resolution to the Russia-Ukraine conflict, with the negotiations scheduled to commence at 1 p.m. local time. This marks the first direct talks between the Russian and Ukrainian delegations in three years, following their resumption of direct negotiations on May 16 in Istanbul to address the peaceful resolution of the Russia-Ukraine conflict. The parties reached an agreement to exchange 1,000 prisoners of war and expressed their willingness, "in principle," to continue engagement and negotiations.

Trump adviser defends tariffs in legal dispute, insists they "are not going away"

Senior economic advisors to the Trump administration remained confident on Sunday that tariffs "are not going away," as key provisions of the Trump policy agenda face legal uncertainty. "Rest assured, the tariffs are not going away," stated Commerce Secretary Howard Lutnick on a program. A federal court ruled days earlier that Trump had overstepped his authority in implementing the comprehensive tariffs. A federal appeals court subsequently granted the Trump administration's request to stay the ruling, providing the White House with some breathing room, but officials now face a potentially arduous legal battle. However, Trump's advisors maintain that the tariffs will continue to be enforced in the face of legal challenges - or the administration will find new avenues to pursue them.

National Economic Council Director Kevin Hassett stated on Sunday that he was "very confident" that the Supreme Court justices would uphold Trump's tariff policies, and if the tariffs were blocked, "we will also have other alternatives to ensure that the U.S. re-establishes fair trade," but did not specify how this path would be implemented.

Hungarian Prime Minister: Russia and Ukraine find it difficult to reach agreement on ceasefire

On June 1, it was revealed that Hungarian Prime Minister Viktor Orbán, during an interview with foreign media, disclosed previously unreported details regarding his mediation efforts in the Russia-Ukraine conflict. Orbán stated that during the "peace mission" initiated in early July 2024, he visited Ukraine and advised President Zelenskyy that time was not on Ukraine's side, and the longer the delay in ceasefire, the greater the losses would be. However, Zelenskyy maintained that time favored Ukraine, and it would ultimately achieve military victory. Subsequently, Russia also expressed its position that time was on Moscow's side. Therefore, Orbán believes that a consensus on a ceasefire between Russia and Ukraine is unlikely.

Waller: Interest rate cuts remain possible later this year

In a Monday address, Federal Reserve Governor Waller indicated that tariffs are poised to be a significant inflationary driver this year, with their impact potentially peaking in the latter half of 2025. Substantial uncertainty persists regarding the trade policy outlook. The robust economic performance continuing into April provides the Federal Reserve with a window to assess evolving trade dynamics.

The prospects for interest rate cuts hinge on two factors: the deceleration of inflation and whether the actual impact of tariff measures aligns with the lower end of the anticipated range. Currently, there are no discernible issues with the projected inflation path, and the Federal Reserve is closely monitoring market and economic forecasts concerning inflation. The "good news" is that interest rate cuts remain a possibility later this year.

The South Korean presidential election is set to commence with a "5-to-1" voting scenario. Four former presidents are actively campaigning in support of their respective candidates

The upcoming presidential election in South Korea is scheduled for June 3. Initially, seven candidates registered for the election. However, by June 2, two candidates had withdrawn, resulting in a "5-to-1" competition. Currently, Lee Jae-myung, Kim Moon-soo, and Lee Jun-seok have emerged as the leading contenders. Simultaneously, four former South Korean presidents are conducting their own campaigns, utilizing various methods to endorse the candidates aligned with their respective factions.

[Today's Focus]

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Central Bank

Economic

Waller said tariffs will raise inflation in the “coming months,” but he supports looking through any near-term rise in price growth when setting policy as long as inflation expectations remain anchored.

“Assuming that the effective tariff rate settles close to my lower tariff scenario, that underlying inflation continues to make progress to our 2% goal, and that the labour market remains solid, I would be supporting ‘good news’ rate cuts later this year,” Waller said in remarks prepared for a Bank of Korea conference in Seoul on Monday.

Waller referenced a speech he gave in mid-April, in which he outlined two scenarios for how trade policy may unfold.

His “large-tariff” scenario assumed an average trade-weighted tariff on goods of 25% that remained in place for “some time.” The “smaller-tariff” scenario assumed a 10% average tariff, and that higher country and sector-specific duties would be negotiated lower over time.

In both scenarios, Waller expects the impact of tariffs on inflation would be temporary. He also anticipates the levies will cause an increase in the unemployment rate that will “probably linger.” That said, job cuts would likely be “modest,” he said, under the smaller-tariff option.

“Reported progress on trade negotiations since that speech leaves my base case somewhere in between these two scenarios,” Waller said. He now estimates a 15% trade-weighted tariff on goods imports.

Waller largely dismissed a 2025 surge in the University of Michigan's gauge of consumers’ inflation expectations over the next five to 10 years. He said he prefers to look at market-based measures of inflation compensation and professional forecasters' expectations, which have not seen a similar increase.

Waller said the “strong” labour market and recent progress toward the Fed's 2% inflation goal offer policymakers time to see how trade negotiations unfold, echoing many of his colleagues.

Fed officials have largely indicated rates are in a good place to gain further clarity on President Donald Trump's policies — particularly tariffs — and their impact on the economy before adjusting borrowing costs.

Waller underscored that considerable uncertainty remains around the ultimate level of duties imposed on other countries and sectors. Trump announced Friday that he would be increasing tariffs on steel and aluminum to 50%, from 25%.

“As of today, I see downside risks to economic activity and employment and upside risks to inflation in the second half of 2025, but how these risks evolve is strongly tied to how trade policy evolves,” Waller said.