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Trump announces 25% tariffs on steel and aluminium imports

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Stocks rise despite tariff concerns, led by energy and

tech

sectors

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Analysts worry tariffs may curtail Fed rate cuts

By Chuck Mikolajczak

NEW YORK, Feb 10 (Reuters) - The dollar rose slightly on

Monday after U.S. President Donald Trump warned of more tariffs,

including on steel and aluminium, while a gauge of global stocks

shook off concerns about more duties and advanced.

Speaking to reporters on Air Force One on Sunday, Trump said

he would announce on Monday 25% tariffs on all steel and

aluminium imports into the U.S., and reveal other reciprocal

tariffs soon afterwards.

China's retaliatory tariffs on some U.S. exports take effect

on Monday, with no sign as yet of progress towards a new trade

arrangement between Beijing and Washington.

The dollar index, which measures the greenback

against a basket of currencies, advanced 0.13% to 108.23, with

the euro down 0.13% at $1.0312.

"This is still very early days," said Marc Chandler, chief

market strategist at Bannockburn Global Forex in New York. "The

market's sort of just sort of chopping around rather than really

directional right now."

Against the Japanese yen, the dollar strengthened

0.17% while sterling weakened 0.16% to $1.2386.

The Canadian dollar weakened 0.27% versus the

greenback to C$1.43 per dollar and the Mexican peso

weakened 0.37% versus the dollar at 20.642 as the greenback

retreated from earlier highs.

On Wall Street, U.S. stocks were higher, led by gains in the

energy and tech sectors. The S&P 500 materials

index rose 0.2%, buoyed by gains of more than 5% in

steel companies Nucor ( NUE ) and Steel Dynamics ( STLD ).

Shares of McDonald's also climbed to provide support

for stocks after the fast-food restaurant reported its quarterly

results.

MSCI's gauge of stocks across the globe rose

4.77 points, or 0.55%, to 874.21 and was on track for its fourth

gain in the past five session. Europe's STOXX 600 index

rose 0.63% to hit an intraday record of 546.34.

Europe's continent-wide STOXX 600 index rose 0.5%

after slipping 0.38% on Friday.

Shares of some European steelmakers gained, reversing

earlier declines, including Luxembourg-based ArcelorMittal

and Germany's Salzgitter.

Some analysts are concerned tariffs could rekindle U.S.

inflation pressures, removing flexibility from the Federal

Reserve to cut interest rates, a possible outcome which has

helped support the U.S. dollar since Trump's re-election.

Markets are largely expecting the Fed to hold rates steady

at its March meeting, with expectations for a cut of at least 25

basis points not climbing above 50% until June, according to

CME's FedWatch Tool.

Morgan Stanley chief U.S. economist Michael Gapen said in a

note to clients the recent imposition of tariffs raised the bar

for rate cuts and the firm only expects a single cut this year,

to come at the June meeting.

Fed Chair Jerome Powell is due to speak on Tuesday for the

semiannual monetary policy testimony before the Senate Banking,

Housing and Urban Affairs Committee. His comments on tariffs and

inflation are likely to be closely monitored.

The yield on benchmark U.S. 10-year notes fell

1.8 basis points to 4.469% in the wake of comments from Trump on

Sunday that his administration may look into Treasury debt

payments for signs of fraud.

Oil prices rebounded despite lingering fears over a

potential global trade war. U.S. crude rose 1.49% to

$72.06 a barrel and Brent rose to $75.64 per barrel, up

1.29% on the day.