Markets are moving higher Thursday, thanks in part to a softer tone on tariffs, but shares of U.S. Steel (X) are falling 2%. Peers including AK Steel Holding (AKS) and Steel Dynamics (STLD) are also lower in recent trading.
That may seem slightly confusing, given that U.S. Steel also sold off after the tariffs were announced last week. It may be that investors are worried about the tariff rollbacks or just want a more decisive plan from Washington, given how much volatility stocks have endured on the news.
Investors may also be concerned that U.S. Steel’s decision to restart two blast furnaces at its steelmaking facility in Illinois is premature. Credit Suisse’s Curt Woodworth, for one, doesn’t think it is.
Woodworth reiterated an Outperform rating on the stock today and boosted his price target to $55 from $48, writing that the decision to reactive the blast furnaces should be highly accretive to U.S. Steel. He argues that it is a strategic move that makes sense regardless of where the U.S. finally comes down on tariffs and Section 232 of the Trade Expansion Act of 1962 (which allows for the investigation of imports and their impact on national security), as “payback should be rapid and U.S. Steel is already short on volume.”
U.S. Steel is down 91 cents to $44.78 in morning trading. The SPDR S&P Metals & Mining ETF (XME) is down 1.38%, to $37.16.