Cleveland-Cliffs Inc. (NYSE: CLF) stock soared 5.18% in pre-market trading on Monday following the release of its third-quarter 2025 earnings report, which showed signs of recovery in the U.S. steel industry. The company's adjusted earnings per share (EPS) of -$0.45 beat analyst estimates of -$0.48, despite reporting a net loss of $234 million for the quarter.

While Cleveland-Cliffs' Q3 revenue of $4.7 billion fell short of the expected $4.9 billion, CEO Lourenco Goncalves highlighted a clear recovery in demand for automotive-grade steel made in the USA. Goncalves attributed this positive trend to the new trade environment implemented by the Trump administration, which has led to new and growing supply arrangements with major automotive OEMs.

The company also announced its exploration of rare earth potential at mining sites in Michigan and Minnesota, aligning with the national strategy for critical material independence. This diversification effort could provide additional growth opportunities for Cleveland-Cliffs in the future.

Despite the challenges faced by the steel industry, including the impact of tariffs, Cleveland-Cliffs' better-than-expected earnings and positive outlook for automotive steel demand appear to be driving investor optimism. The company's ability to navigate the changing trade landscape and focus on high-value products for the automotive sector seems to be resonating with the market, contributing to the significant pre-market stock surge.