Metal Monday

Stock traders with an eye on other markets were probably aware that, despite a strong year for the major US equity indexes in 2024, gold outgained the S&P 500 (SPX) by about three percentage points in 2024.

So far, 2025 has been more of the same. As of Monday, gold was outperforming the SPX by around eight percentage points (roughly 11% to 3%).

Metals have thrust themselves into the market spotlight recently for a couple of reasons. One is that gold has made repeated record highs over the past couple of weeks, with spot prices topping $2,900 for the first time. One frequently cited catalyst is the uncertainty surrounding US trade policy, and the possibility that tariffs may increase inflation.

But the following chart of the year-to-date gains (as of midday Monday) for April gold futures (GCJ5), March silver futures (SIH5), March platinum (PAH5) futures, and March copper (HGH5) futures shows the three precious metals are being outpaced by their industrial cousin, copper:

Also, another industrial metal, steel, was Monday’s biggest gainer, driven by—ironically—new tariffs. March steel futures (HVH5) rallied nearly 6% Monday as the White House announced tariffs on steel and aluminum imports.¹

The news made itself felt in equities. US Steel (X) and Steel Dynamics (STLD) both climbed nearly 5%, while Cleveland Cliffs (CLF) rallied almost 18%. And while aluminum prices gained much less than steel (less than 1.5%), Kaiser Aluminum (KALU) and Alcoa (AA) both rallied more than 2%.

There are two issues traders watching these moves may be weighing. One is that, as we saw last week, the tariff situation is dynamic. Not only is it difficult to project their economic consequences, but tariffs announced one day may be canceled or postponed the next (as we saw with Canada and Mexico). Also, while the stocks of companies involved in the mining or refining and production of metals often track the trends in their underlying markets, correlation is by no means guaranteed. Their prices may diverge unexpectedly from the prices of the commodities they deal in.

Market Mover Update: Energy and tech were the strongest S&P 500 sectors on Monday, while financials and health care were the weakest.

FormFactor (FORM) is still looking for traction since it recovered more than half of a 20% intraday sell-off last Thursday. The stock was little changed on Monday after pulling back Friday (see “When a reversal reverses”).

Allegro Microsystems (ALGM) retreated again from the top of its trading range, following through on Friday’s downturn with a 5.3% intraday decline on Monday (see “Pre-earnings put push”).

Today’s numbers include (all times ET): NFIB Business Optimism Index (6 a.m.), Jerome Powell's Semiannual Monetary Policy Report to Congress (10 a.m.).

Today’s earnings include: AutoNation (AN), BP (BP), Humana (HUM), WK Kellogg (KLG), Coca Cola (KO), Shopify (SHOP), Doordash (DASH), Lyft (LYFT), Mercury General (MCY), Upstart (UPST), Zillow (ZG).

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¹ CNBC.com. Trump to impose 25% tariffs on steel and aluminum — here are the likely winners and losers. 2/10/25.