Key Highlights

  • Cleveland-Cliffs was one of the standout gainers on the S&P MidCap 400 as its shares rebounded.
  • The bounce came amid a broad rally across steel and aluminum producers, not fresh company news.
  • Materials was the best-performing S&P 500 sector the same session.
  • The company reports third-quarter Earnings on Oct. 19, guiding to about $575 million in EBITDA.

Cleveland-Cliffs shares jumped on Monday, Oct. 5, bouncing back from a late-September selloff over its Stelco shutdown as steel stocks rallied across the board.

Cliffs Bounces Back

Cleveland-Cliffs (NYSE:CLF) was one of the standout gainers on the S&P MidCap 400 on Monday. The steelmaker's shares jumped to about $12.44, though reports differed on exactly how far the stock rose, and trading Volume surged.

The move was a rebound. Cleveland-Cliffs sold off in late September after announcing an indefinite shutdown of cold-rolled and coated operations at Stelco, its Canadian unit in Hamilton, Ontario. On Monday, investors appeared to look past that news, with the fallout described as fading.

There was no fresh company announcement on the day. Instead, the bounce came as the entire steel group moved higher.

A Broad Steel Rally

Cliffs had plenty of company. Nucor (NYSE:NUE) rallied to about $252.47 and Steel Dynamics (NASDAQ:STLD) climbed to about $244.04. Worthington Steel (NASDAQ:WS) and Commercial Metals (NYSE:CMC) also rose with the group. Steel and aluminum producers rallied on industrial demand, with Alcoa (NYSE:AA) and Century Aluminum (NASDAQ:CENX) joining in, and steel stocks broadly were helped by trade protections.

The metals push made materials the best-performing S&P 500 sector on Monday. That stood out on a day when the broader market's gains were heavily concentrated in big technology names.

For Cleveland-Cliffs, the Canadian market has been a focus for some time. Back in July, chief executive Lourenco Goncalves said the company was "beginning to see meaningful improvement in the Canadian market." The later Stelco shutdown decision put that region back under the microscope, which is why Monday's recovery drew attention.

The Market Around It

The Nasdaq Composite rose 286.45 points to a record 27,477.31 and the Nasdaq-100 closed at a record 31,076.44. The S&P 500 gained 51.23 points to 7,773.95, just shy of its summer record, and the Dow added 90.94 points to 51,267.90. The Russell 2000 rose 14.24 points to 2,847.14.

Interest rates were a key theme. The 10-year Treasury Yield climbed to its highest level since 2002, even though Friday's September jobs report showed payrolls rising by only 29,000. That weak report cut bets on another Fed hike in October to roughly one in four or less, while the ISM services survey showed prices paid at their highest since July 2022, keeping Inflation worries alive.

Energy markets were also in view. Oil fell, with Brent settling at $100.32 and WTI near $89.43, even though the Strait of Hormuz remained effectively closed. Lower energy prices gave stocks some relief, with one strategist noting investors were looking for anything positive to focus on, pointing to cheaper energy.

Elsewhere in industrial news, Boeing (NYSE:BA) won a contract action worth about $14.7 billion from Lockheed Martin (NYSE:LMT) to expand production of PAC-3 MSE missile seekers, while C.H. Robinson Worldwide (NASDAQ:CHRW) tumbled after agreeing to buy RXO (NYSE:RXO).

What to Watch Next

The next big date for Cleveland-Cliffs is its third-quarter earnings report on Oct. 19. The company has guided to EBITDA of about $575 million for the quarter, and investors will be looking for updates on Stelco and the Canadian market. Commercial Metals is also set to hold its fiscal fourth-quarter Earnings Call on Oct. 15, which could offer another read on steel demand.

On the macro side, the Fed releases its September meeting minutes on Wednesday, Oct. 7, at 2 p.m. ET. For Cleveland-Cliffs, Oct. 19 remains the date that actually matters most.