Tariffs Drive Steel Stock Gains As Analyst Highlights Catalysts For Nucor, US Steel

While tariff chatter dominates headlines, JPMorgan analyst Bill Peterson sees bigger implications for steel stocks beyond the political drama.

His latest analysis highlights key players poised to benefit from higher pricing and shifting trade flows, setting up significant upside potential.

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The Winners: Nucor, US Steel And Steel Dynamics

Nucor Corp NUE remains Peterson's top pick, rated Overweight. Its product diversification gives it a structural advantage, helping to weather market volatility even as rate and trade policy uncertainty clouds the steel outlook.

The company is prioritizing profitability over volume, a strategy Peterson believes warrants a multiple expansion for both Nucor and the broader sector.

U.S. Steel Corp X also holds an Overweight rating. The key catalyst? Peterson views the stalled NSC deal as unlikely to go through, leaving U.S. Steel to stand alone with strong valuation support.

Easing capex requirements and a likely free cash flow inflection in 2025 could pave the way for share buybacks, while new growth projects add further upside.

Read Also: United States Steel Shares Are Up Today: What’s Going On?

Steel Dynamics Inc STLD lands a Neutral rating. The company's aluminum rolling mill (ADI) project could create long-term value, but Peterson sees a longer runway to meaningful impact.

Near-term, risks include potential pricing pressure on its Steel Fabrication segment and UBC spreads affecting ADI margins.

How Tariffs Fit In

The latest round of Section 232 tariffs—signed into action Monday evening—has already fueled a rally in steel stocks. While the broader market saw modest gains, steel stocks jumped 5% to 17% in anticipation of higher pricing. The HRC forward curve is already up ~10% since pre-election levels, and industry participants at the Tampa Steel Conference see a potential price range of $850-$900 per ton, with peaks near $1,000 per ton.

The biggest winners in a sustained high-price environment?

Peterson sees stocks with high spot exposure—particularly U.S. Steel and Cleveland-Cliffs Inc CLF—benefiting first. However, Nucor remains his long-term favorite, given its earnings stability in both strong and weak pricing environments.

Looking Ahead

The near-term setup is clear: higher steel prices, a favorable demand-supply dynamic, and strategic positioning give steel stocks room to run.

But the longer-term picture is less certain, with potential shifts in exemptions and demand-side risks looming. For now, though, Peterson's bullish stance suggests steel stocks remain well-positioned.

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• Tech Stocks Surge, Steelmakers Jump On Trump’s 25% Tariffs, Copper Hits 9-Month Highs: What’s Driving Markets Monday?

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