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CNBC
15-07-2025
- Business
- CNBC
How to navigate trade war's metals and mining conflicts using ETFs
Recent headlines from President Trump's trade war have extended to the metals market, providing investors with more reason to look at exchange-traded funds that focus on stocks and commodities in the mining sector, and not just the gold and other precious metals trades that have done well in 2025. Last week, Trump announced plans for a 50% tariff on imported copper to go into effect August 1. Then, the Pentagon announced it would become the largest shareholder in rare earth miner MP Materials as the U.S.-China trade war specifically has highlighted the urgent need for the U.S. to shore up its own supply of rare earth elements. MP Materials owns the only operational rare earth mine in the U.S. at Mountain Pass, California, about 60 miles outside Las Vegas. On Tuesday, Apple announced a $500 billion deal with MP Materials for domestic supply of neodymium magnets used in Apple products. The two companies also plan on creating a rare-earth recycling line allowing industrial scrap and electronics to be reused in Apple products. MP's stock has nearly soared since the beginning of the year, up over 270% after the Apple deal, but the broader metals and mining sector has been rising as well. Last week, the SPDR S&P Mining and Metals ETF (XME) hit its highest price since 2011. Both MP Materials and Freeport McMoRan, a major global metals mining company with major copper mines in the U.S., are among the top 10 holdings in XME. After its recent spike, MP Materials has become the second-largest holding in XME, after steel maker Cleveland Cliffs. Meanwhile, the VanEck Rare Earth ETF (REMX) has increased by more than 17% over the last month. Copper prices rose after the Trump tariff announcement, and the metal had its biggest one-day gain since 1989. While U.S. buyers could end up paying $5,000 more per metric ton than other copper buyers around the world, investors are benefitting. Copper is the third-most-consumed metal globally, behind iron and aluminum. The U.S. imports nearly half of the copper it uses, according to the U.S. Geological Survey. FCX owns seven copper mines in North America, and controls four of the five largest U.S. copper mines. Its shares are up over 20% year-to-date. "Copper is the second most used material by the Department of Defense," Trump wrote in a post on Truth Social about the tariff plans. There are several metals and mining ETFs that focus on copper, specifically, including the iShares Copper and Metal Mining ETF (ICOP) and Global X Copper Miners (COPX), both higher by roughly 16% this year; and Sprott Copper Miners ETF (COPP), up a little over 12%. Freeport McMoRan is the largest holding in ICOP and COPP, while No. 2 overall in COPX. It is considered one of the stocks likely to benefit the most from Trump's tariffs, according to Bank of America analysts. Disclaimer
Yahoo
08-04-2025
- Business
- Yahoo
Is Market Rebound a Value Play or Value Trap? ETFs in Focus
After a brutal last week on Trump tariff concerns, Wall Street attempted to bounce back on April 7. Invesco QQQ Trust QQQ added 0.24% in the key trading session and advanced 1.2% after hours. SPDR S&P 500 ETF Trust SPY lost 0.2% but added 1.1% after hours, and The SPDR Dow Jones Industrial Average ETF Trust DIA slipped around 1% during regular trading on April 7 but recovered with a 1.3% gain in after-hours trading. In a nutshell, Wall Street didn't exactly rally on Monday, but after a brutal 10% sell-off over two sessions, a more-or-less flat close came as a relief. Still, market nerves are far from settled. The VIX volatility index surged above 60 — only the second time it has reached such levels since the COVID-19 pandemic. Skepticism surrounds the sustainability of the current rebound. Despite the market's bounce, President Donald Trump has shown no sign of easing up on his aggressive trade stance. In fact, he has escalated the situation, threatening an extra 50% in tariffs on China — raising total levies well beyond 100%. Many Wall Street strategists are cutting the S&P 500 target on Trump's tariffs. DoubleLine's Gundlach said the S&P 500 could bottom at 4,500 and suggested investors to stay defensive, as quoted on CNBC. Due to Trump tariff fears, recessionary risks have Sachseconomists, led by Jan Hatzius, now see a 45% chance of a U.S. recession in the next 12 months, up from 35% last week. Before this, Goldman had been at a 20% recession probability risk, as quoted on Yahoo Finance. Against this backdrop, some U.S. sector-based exchange-traded funds (ETFs) like SPDR S&P Metals and Mining ETF XME and iShares U.S. Medical Devices ETF IHI have made great efforts to rebound. Both ETFs were up in the key trading session on April 7, unlike other funds. XME added 2.1% while IHI gained 0.7%. Meanwhile, Japan emerged as the standout performer. The Nikkei jumped 6%, thanks to optimism that Trump's tariff threats might be a start to negotiations. Supporting this view, U.S. Treasury Secretary Scott Bessent is expected to lead trade talks with Tokyo in the coming days. iShares MSCI Japan ETF EWJ could act as a good pick here. The ETF EWJ added 1.5% after hours on April 7. It all depends on tariff negotiations. If the situation worsens, we may see a further slide in stocks. And if there is any glimmer of hope on the tariff front, beaten-down stocks and ETFs would stage an ascent. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports iShares MSCI Japan ETF (EWJ): ETF Research Reports SPDR S&P Metals & Mining ETF (XME): ETF Research Reports iShares U.S. Medical Devices ETF (IHI): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
13-03-2025
- Business
- Yahoo
New Tariff Threat Boosts Steel, Aluminum ETFs
President Trump threatened increased tariffs of steel and aluminum imports from Canada, boosting exchange-traded funds with large allocations to American steel and aluminum manufacturers. In a statement posted to social media Tuesday morning, the president wrote: "Based on Ontario, Canada, placing a 25% Tariff on 'Electricity' coming into the U.S., I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA..." The VanEck Steel ETF (SLX), a pure steel ETF, initially pared gains, slipping into the red during intraday trading before marching upward. By Tuesday's close, SLX had jumped over 1.3%. The SPDR S&P Metals & Mining ETF (XME) soared, rising over 3% as it was boosted by jumps in American steel and aluminum stocks. United States Steel Corp. (X) rose by over 5%. The stock is in the top-10 holdings for both funds. Despite the jumps, the move wasn't widely celebrated across the market as Trump threatened to further extend his tariffs. In his note, Trump added: "If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!" The Industrial Select Sector SPDR Fund (XLI) spent Tuesday on a rollercoaster ride in the red, dropping as much as 1.7%. Source: The iShares U.S. Manufacturing ETF (MADE) and the Vanguard Industrials ETF (VIS) dropped by 0.8% and 1.2%, respectively, at the close, weighed down by manufacturing companies whose production costs will rise from tariffs levied on Canadian imports of steel and aluminum. Broad market funds also took a leg lower. The SPDR S&P 500 ETF Trust (SPY) sank by nearly 1.5% before paring losses and jumping briefly into the green. The SPDR Dow Jones Industrial Average ETF Trust (DIA) also tried to claw back some gains but stayed in the red into the market close. Source: Trump's tariffs have caused markets to whipsaw in the past weeks, reversing gains made by broad market ETFs in 2024. The Vanguard S&P 500 ETF (VOO) has dropped over 9% since mid-February as the trade war has escalated. Currently, the S&P 500 is flirting with correction territory, characterized by a 10% drop or more from a recent | © Copyright 2025 All rights reserved Sign in to access your portfolio
