Freeport-McMoRan Plummets Amid Tariff Tensions—What’s Next for Copper Giants?

• FCX slumps 2.65% to $45.96, hitting a session low of $45.66 after surging 5% on tariff hopes earlier this week.
• UBS downgrades to Neutral, citing demand risks while Trump’s 50% Brazilian copper tariff looms.
• Southern Copper (SCCO), sector bellwether, mirrors FCX’s decline (-1.75%), signaling broader sector jitters.
• Technicals show RSI overbought (72.06), with Bollinger Bands hinting at exhaustion near the middle band ($43.19).

Today’s selloff tests Freeport’s tariff-driven narrative, as traders grapple with macro crosswinds and institutional bets. The stock’s 52-week range ($27.66–$52.61) frames volatile terrain, while options activity spikes ahead of July 18 expiry.

Tariff Uncertainty and Downgrade Drive Selloff
Freeport-McMoRan’s sharp decline stems from twin pressures: UBS’ Neutral rating downgrade and escalating U.S.-Brazil tariff tensions. Analysts highlighted softening copper demand fundamentals and concerns over global supply dynamics, particularly as Brazil’s $5.7 billion annual copper exports face a 50% levy. Despite Freeport’s dominant U.S. production footprint (60% market share) and improved ROCE (13% vs. sector’s 9.8%), macro headwinds have outweighed positive catalysts. Institutional buying by Nisa Advisors (+8,754 shares) signals mixed sentiment, but the downgrade and technical resistance at $47.60 (Bollinger upper band) have pushed shares below critical support at the 50-day moving average ($40.92).

Non-Ferrous Metals Sector Struggles Under Trade Pressure
The non-ferrous metals sector faces synchronized pressure as U.S.-Brazil trade tensions disrupt supply chains. Southern Copper’s -1.75% dip underscores vulnerability to tariff-driven volatility, while the Sprott Copper Miners ETF (COPP) tumbles 2.14%, highlighting broader sector fragility. Freeport’s outperformance in ROCE and dividends (yield 1.27%) contrasts with peers, but near-term risks—such as Kazakhstan’s non-ferrous metal export ban until 2025—add to uncertainty. The sector’s reliance on copper prices leaves it exposed to demand shocks, with traders now focused on Freeport’s ability to hold $40.92 support.

Bearish Bias Dominates—Focus on Puts at $42, $44 Strikes
Bollinger Bands: Upper ($47.60) breached briefly, but retreat to Middle Band ($43.19) signals exhaustion.
RSI: 72.06 (overbought), suggesting pullback toward 60–65.
MACD: Bullish crossover (1.71 vs. 1.43), but divergence with price hints at weakness.
Support/Resistance: 30-day support $40.92; 200-day MA $40.87.

Aggressive bears target FCX20250718P44 (Put, $44 strike) and FCX20250718P42 (Put, $42 strike). Key stats:
- FCX20250718P44: Leverage ratio 135.53%, Delta -0.21, Gamma 0.10, Turnover 32,021. This put captures downside risk to $40.92 support. A 5% price drop to $43.86 yields $0.14 intrinsic value—a 14% return.
- FCX20250718P42: Leverage ratio 512%, Delta -0.07, Gamma 0.05, Turnover 18,910. A breach below $40.92 could trigger a surge in value. However, a 5% drop leaves it nearly worthless unless support fails.

Action Alert: Aggressive bears target FCX20250718P44 into a close below $43.20; bulls wait for RSI correction below 65 before buying dips. Monitor the Sprott Copper Miners ETF (COPP) for sector sentiment.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a -3% intraday plunge shows mixed results. While the 3-day win rate is 50%, the 10-day win rate is slightly lower at 47.8%, and the 30-day win rate is 47.48%. This indicates that FCX tends to recover moderately well from such events, but the returns are generally modest, with a maximum return of 2.8% over 30 days.

Buckle Up for Copper Volatility—Support Levels and ETFs to Watch
Freeport-McMoRan’s fate hinges on two critical pivots: $40.92 support and the trajectory of U.S. tariff policies. A breach below this level risks a slide toward the 200-day MA ($38.25), while a rebound above $47.60 would revive bullish momentum. Southern Copper’s -1.75% dip underscores sector-wide caution, but Freeport’s ROCE resilience and dividend yield offer a floor. Investors should prioritize:
- Tracking copper price trends amid U.S.-Brazil tariff developments.
- Watching institutional buying patterns (Nisa Advisors added 2.6% holdings in Q1).
- Expiring options (July 18) could amplify volatility.

Action: Watch for a break of $43.20—below that, FCX20250718P44 dominates the narrative. Meanwhile, the Sprott Copper Miners ETF (COPP) remains a proxy for sector resilience. Hold nothing below $38.25.