Why Shares in Copper Miner Freeport-McMoRan Slumped Today
Shares in copper miner Freeport-McMoRan (NYSE: FCX) were down by 2.5% as of midday Tuesday. The move comes after a strong period for copper mining stocks, buoyed by bid activity in the sector.
Today's down move is a reminder that the demand for copper is reliant on economic growth. So when the market prices in higher interest rates because inflation data in August was worse than expected, it's a cause for concern. If inflation rises, it's more likely the Federal Reserve will hike interest rates, and higher interest rates usually mean lower economic growth. That's bad news for an industrial metal like copper that's used across the economy.
Such volatility is perfectly normal around inflation data, not least in the current environment, and it's not surprising to see a sell-off in energy, metals, and mineral commodities as a consequence.
Source Fool.com
