Freeport-McMoRan Surges 2.11% Amid Tariff Hype and Analyst Upgrades: What’s Fueling the Rally?

Summary
• Freeport-McMoRan (FCX) trades at $42.335, up 2.11% intraday, with a 52-week high of $52.61 and low of $27.66.
• Morgan Stanley upgrades FCX to Overweight, citing Trump’s 50% copper tariffs and pricing power in North America.
• Copper futures at $4.48/lb, up 1.02%, as U.S.-China trade truce extension eases supply concerns.
• Options activity intensifies, with high turnover in August 15th $42.5 and $43.5 calls.
Freeport-McMoRan’s rally reflects a confluence of geopolitical tailwinds and sector-specific optimism. The stock’s 2.11% gain on Tuesday is driven by Morgan Stanley’s bullish upgrade, Trump’s copper tariffs, and a rebound in copper prices. With the U.S.-China trade truce extension and renewed focus on domestic copper demand, FCX’s strategic positioning in North America is underpinned by both macro and micro catalysts.

Trump Tariffs and Pricing Power Ignite FCX Rally
Freeport-McMoRan’s 2.11% intraday gain is directly tied to President Trump’s 50% copper tariffs on semi-finished products, which Morgan Stanley argues will bolster the company’s pricing power. The firm upgraded FCX to Overweight, noting that two-thirds of its North American sales are copper rod, a product now shielded from import competition. Analysts predict 40% price increases in 2026 contracts, while the recent 9% selloff in July is seen as overdone. Copper futures at $4.48/lb also support the rally, as U.S. demand for copper rod—excluded from tariffs—positions FCX to capture market share amid global trade uncertainty.

Copper Sector Volatility: FCX Outperforms Peers Amid Tariff Uncertainty
FCX’s 2.11% gain outpaces Southern Copper (SCCO)’s 1.58% rise and Hudbay Minerals (HBM)’s 3.09% jump, reflecting its dominant exposure to U.S. copper rod markets. While SCCO and Ero Copper (ERO) face broader commodity price swings, FCX’s tariff-driven pricing power creates a structural advantage. Peru’s mining project approvals and Chile’s trade talks add sector-wide noise, but FCX’s North American focus and Morgan Stanley’s $48 price target (14% upside) make it a standout in a fragmented sector.

Options and ETFs for a Bullish FCX Play: Leverage and Liquidity Focus
• 200-day average: 40.206 (below current price)
• RSI: 31.86 (oversold)
• MACD: -0.749 (bearish), Signal Line: -0.516 (neutral)
• Bollinger Bands: 38.24–47.11 (current price near lower band)
• Gamma: 0.2437 (high sensitivity to price moves)
• Theta: -0.2079 (rapid time decay)
• IV: 36.26% (moderate)
FCX’s technicals suggest a short-term rebound after oversold RSI and a bullish breakout above the 200-day average. Key levels to watch: 42.67 (intraday high) and 41.70 (support). The 42.5 and 43.5 calls offer high leverage and liquidity for a near-term play.
Top Option 1: FCX20250815C42.5
• Strike: $42.50, Expiry: 8/15, Type: Call
• IV: 36.26% (moderate)
• Leverage Ratio: 79.72% (high)
• Delta: 0.4489 (moderate sensitivity)
• Theta: -0.2079 (rapid decay)
• Gamma: 0.2467 (high sensitivity)
• Turnover: 91,120 (liquid)
• Payoff at 5% Upside: $0.96 (max(0, 44.45 - 42.50))
This contract balances leverage and liquidity, ideal for a short-term bullish bet as FCX tests 42.67 resistance.
Top Option 2: FCX20250815C43.5
• Strike: $43.50, Expiry: 8/15, Type: Call
• IV: 40.62% (high)
• Leverage Ratio: 156.48% (very high)
• Delta: 0.2555 (low sensitivity)
• Theta: -0.1457 (moderate decay)
• Gamma: 0.1789 (moderate sensitivity)
• Turnover: 3,157 (liquid)
• Payoff at 5% Upside: $0.96 (max(0, 44.45 - 43.50))
High leverage suits aggressive bulls, though delta’s low sensitivity requires a sharper move to unlock gains.
Action: Aggressive bulls may consider FCX20250815C42.5 into a breakout above $42.67, while FCX20250815C43.5 offers high-reward potential for a sustained rally.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after an intraday surge of at least 2% indicates positive short-to-medium-term gains, with win rates and returns increasing across 3, 10, and 30 days. This suggests that following such intraday momentum, FCX can deliver favorable returns over various time frames, making it a potentially effective strategy for those looking to capitalize on short-term price movements.1. Frequency and Win Rates: The event occurred 603 times over the backtested period. The 3-day win rate was 54.23%, the 10-day win rate was 57.21%, and the 30-day win rate was 59.37%. This indicates a higher probability of a positive return in the short to medium term following the intraday surge.2. Returns: The average 3-day return was 0.55%, the 10-day return was 1.40%, and the 30-day return was 3.98%. While the returns seem modest, they are consistent and add up over time, especially considering the strategy's frequency of success.3. Maximum Return: The maximum return during the backtest was 6.77%, which occurred on day 59. This highlights the potential for substantial gains if the strategy is aligned with FCX's price movements.

FCX’s Tariff-Driven Rally: Position for a 2026 Pricing Surge
Freeport-McMoRan’s rally is underpinned by structural tailwinds from Trump’s copper tariffs and Morgan Stanley’s pricing power thesis. With 40% of copper rod prices projected to rise by 2028, FCX’s near-term technicals and options liquidity make it a compelling play. Investors should monitor the 42.67 resistance and 41.70 support levels, while Southern Copper (SCCO, +1.58%) highlights sector volatility. For a high-conviction trade, FCX20250815C42.5 offers a balanced risk-reward profile. Watch for a sustained close above $42.67 to confirm the breakout.