Aircraft are a big part of Allegheny Technologies' demand. Image source: Getty Images.

What: Shares of Allegheny Technologies Incorporated (NYSE:ATI) jumped 39.7% in July after getting a positive Commerce Department ruling and reporting second quarter earnings.

So what: On July 12, the Commerce Department made a preliminary determination that stainless steel sheet and strip from China was getting unfair government subsidies. As a result, those products will be hit with tariffs as they come into the U.S.  

The other news was second quarter earnings, which saw revenue fall 21% to $810.5 million and net loss was $18.8 million. But adjusted loss per share was $0.21, which easily topped the $0.39 per share loss expected by Wall Street analysts.

Now what: Investors are increasing speculation that Allegheny Technologies will be able to increase prices and margins as a result of tariffs on Chinese steel. That may happen slowly if tariffs hold, but right now Allegheny is losing money and sales in a highly competitive market. Watch over the next few quarters if the tariffs do start to help margins and the company's competitive position long-term. We've seen China keep the market oversupplied for years now, so betting on a recovery is still a big gamble.