ArcelorMittal Plunges 5.6% as Tariff Woes Overshadow Strong Earnings—Can the Steel Giant Weather the Storm?

Summary
• ArcelorMittal’s stock tumbled 5.6% to $30.65, erasing gains after a Q2 beat and $150M tariff forecast.
• Earnings showed $1.9B EBITDA and $2.35 EPS, but demand concerns and U.S. tariffs sparked selloff.
• Options volatility spiked, with 28.14% implied volatility on the 28-strike put and 141.58% on the 30-strike call.
• Intraday range of $30.2–30.69 highlights sharp reversal from pre-market optimism to panic.
Today’s selloff reflects a clash between ArcelorMittal’s operational resilience and macroeconomic headwinds. Despite a robust EBITDA margin and strategic U.S. expansion, investors are pricing in $150M in tariff-related losses and tepid demand forecasts. The stock’s 5.6% drop underscores a fragile balance between fundamentals and external pressures.

Tariff Headwinds and Demand Forecasts Trigger Sharp Sell-Off
ArcelorMittal’s 5.6% plunge is driven by two key factors: 1) a revised $150M tariff impact on core profits, doubling its February forecast, and 2) a reduced steel demand outlook as U.S. trade policies disrupt supply chains. The company’s CFO, Genuino Christino, admitted tariffs are straining margins, forcing cost-sharing with customers and operational shifts in the U.S. Meanwhile, ArcelorMittal’s Q2 earnings, while strong on paper ($1.9B EBITDA), were overshadowed by these macro risks. The stock’s intraday range of $30.2–30.69 reflects panic selling as traders priced in the worst-case scenario for 2025.

Steel Sector Volatility Intensifies as Tariff Pressures Mount
The steel sector is under duress, with peers like Nucor (NUE) down 0.86% and Cleveland-Cliffs reporting a $400M Q2 loss. ArcelorMittal’s selloff mirrors broader industry pain from U.S. tariffs, EU CBAM delays, and soft global demand. While ArcelorMittal’s EBITDA margin of $135/ton outperforms peers, its exposure to U.S. and European markets makes it a bellwether for trade policy risks. The sector’s technicals are bearish: Nucor’s RSI at 35.64 and the 200D MA at $27.93 suggest further consolidation unless tariffs abate.

Technical and Options Playbook: Navigating MT’s Volatile Path
• 200-day average: $27.93 (below current price) • RSI: 35.64 (oversold) • MACD: 0.43 (bullish divergence) • Bollinger Bands: $31.86–34.80 (price at 30.65, near lower band)
Key levels to watch: 1) Support: 30D MA at $33.05, 2) Resistance: 200D MA at $27.93. Short-term bearish momentum (RSI at 35.64) suggests a test of $30.00, but long-term fundamentals (52W high of $34.90) imply a rebound above $33.33 could reignite bullish sentiment. Leverage ETFs like XLB (Steel Select Sector SPDR) are not available, but options on MT offer high-risk/high-reward potential.
Top Option 1: MT20250815P30 (Put, $30 Strike, 8/15 Expiry)
• IV: 35.77% (moderate) • Leverage: 61.90% • Delta: -0.319 • Theta: -0.0075 • Gamma: 0.154 • Turnover: $4,085
• IV = Implied volatility (moderate for bearish bets) • Leverage = Amplifies downside potential • Delta = Sensitive to price drops • Theta = Low decay, favoring short-term holds • Gamma = High sensitivity to price swings • Turnover = High liquidity for entry/exit
This put option is ideal for a 5% downside scenario. Projected payoff: $30.65 × 0.95 = $29.12. If MT drops below $30, intrinsic value = $0.88, plus time value. Given the 14.98% IV and high gamma, this contract could outperform if tariffs escalate.
Top Option 2: MT20250815P31 (Put, $31 Strike, 8/15 Expiry)
• IV: 44.28% (elevated) • Leverage: 26.91% • Delta: -0.483 • Theta: -0.0068 • Gamma: 0.1388 • Turnover: $1,195
• IV = Elevated for bearish positioning • Leverage = Moderate amplification • Delta = High sensitivity to price drops • Theta = Low decay • Gamma = Strong responsiveness • Turnover = Sufficient liquidity
Payoff projection: $29.12 strike vs. $31.00. If MT falls to $29.12, intrinsic value = $1.88. The 44.28% IV and -0.483 delta make this a high-probability trade if the stock breaks below $30.00. However, the lower leverage ratio (26.91%) caps potential returns compared to the $30-strike put.
Hook: Aggressive bears should prioritize MT20250815P30 for a 5% downside scenario. If MT breaks $30.00, this contract could deliver 88%+ gains as implied volatility spikes.

Backtest Arcelormittal Stock Performance
ArcelorMittal (MT) experienced a notable intraday plunge of -6%, but the subsequent performance varied based on the time frame:1. Short-Term Performance: - The stock showed a strong recovery within the same trading session. The market dynamics suggested a V-shaped reversal, with the price bouncing back to nearly erase the losses by the end of the day. - This is consistent with the notion that the initial sell-off was overreactive or oversold, creating a buying opportunity for investors who took a long-term view.2. Long-Term Performance: - One week later, ArcelorMittal's stock price had fully recovered and even surpassed the pre-plunge levels. This indicates a strong resilience in the stock's price trend, which is typical for steel stocks that benefit from supply and demand dynamics and macroeconomic stimulus. - The steep initial decline served as a discounted entry point for investors looking to capitalize on the company's fundamentals, which include a strong Q2 performance and strategic expansions.In conclusion, ArcelorMittal's stock demonstrated a robust recovery after a -6% intraday plunge, offering a favorable risk-reward scenario for long-term investors who navigated the volatility. The backtest highlights the importance of maintaining a long-term perspective in investing, especially in commodity-related stocks that are prone to sharp price movements but often have strong fundamental supports.

Steel’s Crucible: Time to Ride the Volatility or Exit the Fire?
ArcelorMittal’s 5.6% drop is a cautionary tale of macroeconomic fragility. While the company’s EBITDA margin and U.S. expansion offer long-term resilience, near-term risks—$150M in tariff costs, soft demand, and sector-wide volatility—loom large. Investors should monitor the 30D MA at $33.05 and 200D MA at $27.93 for directional clues. For now, the put options MT20250815P30 and MT20250815P31 offer the best short-term exposure to a potential 5% correction. Watch Nucor (NUE, -0.86%) for sector sentiment. Action: Target $30.00 support with the $30-strike put; exit if 33.05 retests. Tariff news and CBAM updates will dictate next moves.