Steel stocks fall as they get a taste of the 'TACO trade'

By Tomi Kilgore

President Donald Trump is planning to cut some tariffs on steel and aluminum imports, the FT reports, but Peter Navarro called it 'fake news'

Steel and aluminum stocks fell after an FT report that President Donald Trump is softening his stance on tariffs - a subject of consumer complaints about rising prices.

Shares of steel and aluminum producers were taking a hit Friday, as investors expressed disappointment that President Donald Trump may be softening his trade stance again amid increasing backlash from consumers about affordability.

The Financial Times reported that the Trump administration is reviewing a list of steel and aluminum products that were hit with tariffs of up to 50% last summer, as part of the president's plan to scale back levies and exempt some items.

The shift in stance comes as officials at the U.S. Commerce Department believe the tariffs are hurting consumers by raising prices for goods containing metal products, such as auto parts and food and drink cans, the FT report said, citing people familiar with the matter. It also comes as Trump's approval ratings have fallen to new lows, according to the New York Times, and ahead of midterm elections in November.

The softening tone on global tariffs is an example of what Wall Street has called the "TACO trade." The acronym, which was popularized by an FT columnist last year, stands for Trump Always Chickens Out. It often leads to rallies of stocks of companies hurt by tariffs that were later cut. But for steel and aluminum companies, the trade is working in the opposite direction.

While steelmaker stocks held their losses through the close, they bounced off their worst levels, after Peter Navarro, a senior counselor to President Trump for trade and manufacturing, wrote in a social-media post that the FT story was "fake news."

And a White House official said unless it was being announced by the Trump administration, any report on changes in tariff policy is baseless speculation.

Shares of Steel Dynamics (STLD) closed down 3.9%, but had been down as much as 7.3% earlier in the session. The selloff follows a 3.1% pullback on Thursday from Wednesday's record close of $205.78.

Nucor's stock (NUE) fell 3% on Friday, to pare an earlier intraday loss of 6.2%, after closing at a near two-year high on Wednesday. Reliance shares (RS) shed 3.6% after reaching a record on Wednesday.

In the aluminum business, Alcoa's stock (AA) gave up 0.9%, after being down 6.2% at its intraday low. Meanwhile, Kaiser Aluminum shares (KALU) closed up 0.2%, to reverse an intraday loss of as much as 7.2%.

There were some companies that investors seem to believe will benefit from Trump's shift in stance; for them, lower prices on steel and aluminum could help spark renewed consumer interest in their products.

Advance Auto Parts (AAP) topped fourth-quarter sales expectations but provided a downbeat outlook for the year, but the stock closed Friday up 1.1%. Shares of fellow auto-parts seller AutoZone (AZO) rose 1.8%.

Meanwhile, shares of canned-soup seller Campbell's (CPB) tacked on 1.6%, Ford Motor's (F) stock advanced 2% and General Motors shares (GM) rose 1.4%.

-Tomi Kilgore

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02-13-26 1606ET