Freeport-McMoRan Plunged 2.77%—Will Copper Tariff Fears Spark a Sector-Wide Collapse?

Summary
• Freeport-McMoRan (FCX) tumbles 3.85% to $42.21, its lowest intraday level since January 2024
• Chile’s Finance Minister pushes for U.S. copper tariff exemptions amid trade talks
• Copper ETFs like Sprott Copper Miners ETF (COPP) and iShares Copper & Metals Mining ETF (ICOP) fall 1.8%

Freeport-McMoRan’s sharp decline has sent shockwaves through the copper market, with traders bracing for a potential 50% U.S. tariff on copper imports. The stock’s 52-week low of $27.66 now looms as a psychological threshold, while sector peers and leveraged ETFs mirror the bearish momentum. With Chilean diplomacy and Washington’s final decision looming, the question remains: Can FCX stabilize before the August 1 tariff deadline?

Chilean Diplomacy and U.S. Tariff Fears Spur Copper Market Volatility
Freeport-McMoRan’s 3.85% intraday drop is directly linked to Chile’s diplomatic push for U.S. copper tariff exemptions. The proposed 50% import tariff, set to take effect on August 1, has created a regulatory void for producers like FCX. Chilean Finance Minister Mario Marcel’s insistence on excluding copper from the tariff plan has not quelled fears, as traders anticipate supply shocks and arbitrage distortions. The stock’s drop to $42.21 reflects a flight to safety amid fears of a potential 6.2% slump in Comex copper prices and a 26.6% premium over LME prices. The market is now pricing in a worst-case scenario where U.S. consumers bear higher costs while producers face margin compression.

Copper Sector Under Siege as BHP and ETFs Mirror FCX’s Downtrend
The copper sector is in unison as BHP (BHP) declines 1.96%, mirroring FCX’s bearish momentum. Leveraged ETFs like Sprott Copper Miners ETF (COPP) and iShares Copper & Metals Mining ETF (ICOP) fall 1.8%–1.8%, underscoring sector-wide panic. With U.S. copper imports accounting for half of domestic demand and Chile supplying a significant portion, the entire industry is exposed to tariff-driven volatility. The lack of a clear resolution in Washington has left miners in limbo, with FCX’s 52-week high of $52.61 now a distant memory.

Navigating Copper’s Turbulence: ETFs, Options, and Technicals in Focus
• 200-day MA: $40.63 (below current price) • RSI: 48.80 (neutral) • MACD: 0.76 (bullish divergence) • Bollinger Bands: $43.13 (lower band, key support)

FCX is in a short-term bullish trend but long-term range-bound, with critical support at $43.13 and resistance at $47.04. The 52-week low of $27.66 remains a distant floor. For leveraged exposure, the Sprott Copper Miners ETF (COPP) and iShares Copper & Metals Mining ETF (ICOP) offer concentrated risk, though both trade down 1.8%–1.8%.

Top Option 1: FCX20250801C44
• Code: FCX20250801C44 • Type: Call • Strike: $44 • Expiry: 2025-08-01 • IV: 42.33% (moderate) • LVR: 89.73% (high) • Delta: 0.3452 (moderate sensitivity) • Theta: -0.1647 (high time decay) • Gamma: 0.1727 (high sensitivity to price movement) • Turnover: 52,388 (liquid) • Payoff at 5% downside (ST = $41.00): $0
This contract offers aggressive upside potential if FCX breaks above $44, leveraging high gamma and liquidity for rapid directional moves.

Top Option 2: FCX20250801C44.5
• Code: FCX20250801C44.5 • Type: Call • Strike: $44.5 • Expiry: 2025-08-01 • IV: 43.75% (moderate) • LVR: 119.64% (high) • Delta: 0.2728 (moderate sensitivity) • Theta: -0.1415 (high time decay) • Gamma: 0.1507 (high sensitivity to price movement) • Turnover: 45,323 (liquid) • Payoff at 5% downside (ST = $41.00): $0
FCX20250801C44.5 is ideal for bullish traders expecting a rebound above $44.5, with high leverage and gamma to amplify gains in a volatile environment.

If $43.13 holds, FCX20250801C44.5 offers a high-conviction trade. Aggressive bulls may consider FCX20250801C44 into a breakout above $44.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a -3% intraday plunge shows favorable results, with win rates and returns indicating positive short-to-medium-term gains. The 3-Day win rate is 50.15%, the 10-Day win rate is 48.00%, and the 30-Day win rate is 49.54%, suggesting that FCX tends to recover and even exceed its pre-plunge levels in the following days.

Tariff Uncertainty and Copper’s $43.13 Lifeline: What’s Next for FCX?
FCX’s survival hinges on the August 1 tariff deadline and Chile’s diplomatic efforts. The stock’s 52-week low looms large, but the $43.13 support level and 52-week high of $52.61 remain critical benchmarks. With BHP (BHP) down 1.96%, the sector’s fate is intertwined. Investors must watch for a breakdown below $42.22 or a surge above $47.04 to dictate the next phase. For now, the market is in a holding pattern—waiting for Washington’s final word on tariffs. Watch for $43.13 support or regulatory clarity by August 1.