Wherever he goes, there President Donald Trump is, with constant potential for market-moving words, perhaps considered and perhaps not.
Today, it was an off-the-cuff remark about a niche metal. But investors, traders and speculators are reminded once more of the only certainty right now: Uncertainty.
When he announced during a Tuesday afternoon cabinet meeting a 50% duty on copper imports, the price on the front-month futures contract for the industrial base metal spiked as much as 17%, its biggest intraday gain since 1988. It’s hard to capture that kind of price action, but at least one of the best commodity ETFs will get you some exposure to the red metal.
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“I believe the tariff on copper, we’re going to make it 50%,” Trump said when a reporter asked about rates on metals. Commerce Secretary Howard Lutnick said he expects the levy “to be put in place end of July, maybe August 1.”
As Goldman Sachs commodities analyst Eoin Dinsmore writes, the 50% tariff on copper is double the 25% consensus expectation.
“In time, the copper tariff may revert to 25%,” Dinsmore surmises, “but after factoring in uncertainty on potential future exemptions, we think copper should move to price a 40% import tariff.” This would match similar levels of tariff pricing in other industrial metals such as steel and aluminium.
Dinsmore adds that markets outside the U.S. remain tight and that the drawdown in U.S. supplies as well as easing in market tightness elsewhere “will occur only gradually” beginning late in the third quarter.
The president said he is still thinking about what to do with tariffs on pharmaceutical and semiconductor manufacturers.
By the closing bell, the Nasdaq Composite had added 0.9% to 20,611, the S&P 500 was up 0.6% at 6,263, and the Dow Jones Industrial Average had risen 0.5% to 44,458.
Is AES an AI stock?
AES (AES) certainly has a place among the best value stocks to buy with a 37% trailing-12-month decline through Wednesday’s close but a consistent dividend history.
According to Bloomberg, the electric power utility “is exploring options including a potential sale amid takeover interest.” And private equity firms and infrastructure investors are circling AES amid a two-year slide that’s seen it lose half of its market value.
AES stock was up as much as 20.5% and closed with a 19.8% gain. Management said the company doesn’t respond to “rumors in the marketplace.”
AES has completed multiple power purchase agreements with AI hyperscalers and data-center operators such as Google parent Alphabet (GOOGL, +1.3%), Facebook parent Meta Platforms (META, +1.7%) and Microsoft (MSFT, +1.4%).
Bloomberg says Brookfield Asset Management (BAM, +1.1%) and BlackRock (BLK, +1.2%) subsidiary Global Infrastructure Partners are potential suitors for AES.
The $4 trillion company
Nvidia (NVDA) was up another 1.8% Wednesday and fulfilled what has seemed like its destiny since the AI revolution gained real traction in the early 2020s, becoming the first publicly traded company in the world to cross the $4 trillion market capitalization threshold.
Nvidia was founded in 1993. NVDA stock passed the $1 trillion market cap level in May 2023, the $2 trillion level in February 2024 and topped $3 trillion in June.
The AI stock has rallied 20.8% since management reported earnings May 28 and is now up 21.3% year to date.
Careful with that X account, Elon…
Tesla (TSLA) stock gave back 0.7% Wednesday after Elon Musk responded to a plea from Wedbush analyst Dan Ives to the company’s board of directors to “create ground rules” for the CEO.
“Shut up, Dan,” Musk posted on his social media site, X. (Incidentally, X CEO Linda Yaccarino announced her resignation in a post on X on Wednesday.)
RBC Capital Markets analyst Tom Narayan reiterated his Outperform (or “Buy”) rating on TSLA stock and raised his 12-month target price to $319 from $307.
“We believe there is strong demand for Tesla products even in the face of more EV competition,” Narayan writes, noting the recent sell-off is overdone.
The Fed stands fast
The highlight of this week’s economic calendar provided some light and no heat.
“Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate,” read the minutes of the June FOMC meeting.
At the same time, there is a difference of opinion on how to respond to President Trump’s tariffs.
“Participants agreed that although uncertainty about inflation and the economic outlook had decreased,” the minutes go on, “it remained appropriate to take a careful approach in adjusting monetary policy.”
A “couple” of officials say the next cut could come at the next Fed meeting.
But “several” say the current overnight funds rate “may not be far” from neutral, indicating less willingness to cut. Inflation remains above the 2% policy level in a “resilient” economy, they note.
Discussion continues to generally reflect Fed Chair Jerome Powell’s wait-and-see approach, come what may from the president.
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