Copper Futures Hit Record High on Trump Tariff Threat

US copper futures surged to a record high after Donald Trump proposed a 50% import duty, though London and Shanghai prices fell due to shipping concerns. European stock futures edged higher while Wall Street closed flat, with the Dow dipping slightly and the S&P 500 and NASDAQ closing unchanged. Trump also floated a 200% drug tariff, while the dollar strengthened broadly, particularly against the yen.

Equities

The FTSE 100 rose 0.5% on Tuesday, closing at a three-week high, lifted by a weaker pound and gains in heavyweight energy stocks. BP climbed 3.2%, topping the blue-chip index, as oil prices held near recent highs.

Shell added 2%, also benefiting from strength in the energy sector. Shares in Glencore rose 2.8% and Anglo American was up 1.2%, while Rio Tinto gained 1.3% amid reports that its incoming CEO will be expected to consider mergers and acquisitions as well as cost-cutting measures.

Victrex dropped 8.4% after forecasting weaker second-half profits and announcing a change in leadership. The FTSE 250 index added 0.2%, supported by oil and gas names, though it was dragged by Victrex’s sharp fall. News that Shein had filed for a Hong Kong IPO added to the pressure on the UK equity market, as it joins a list of companies bypassing London due to delays and regulatory hurdles.

In the US, the S&P 500 slipped 0.07%, the Dow Jones fell 0.37%, and the Nasdaq rose 0.03%, as investors reacted cautiously to President Trump’s latest trade threats and waited for clarity on tariffs and interest rates. The energy sector led gains in the S&P 500, rising 2.7%, while utilities and consumer staples both declined by over 1%. The Russell 2000 small-cap index rose 0.66%, outperforming the major indices.

Tesla rose 1.3%, recovering from its steepest single-day drop in a month. Moderna gained 8.8% after a lawsuit filed by major US medical associations boosted sentiment around its COVID-19 vaccine strategy. Freeport-McMoRan climbed 2.5% as investors reacted to the White House’s proposed 50% copper tariff, which may benefit domestic producers.

Solar stocks dropped after Trump directed federal agencies to roll back tax credits for renewable energy projects. SunRun plunged 11.4%, Enphase Energy fell 3.6%, and SolarEdge Technologies declined 1%. Investors are also watching for the release of the Federal Reserve’s June meeting minutes due on Wednesday, which could offer further insight into the future direction of US interest rates.

Forex & Commodities

The US dollar climbed to a more than two-week high against the yen on Wednesday, trading at 147.12 yen after touching 147.19, as stalled trade talks between Washington and Tokyo added pressure to Japan’s currency. The dollar index rose for a third consecutive day, up 0.1%, bolstered by expectations of more tariff-related announcements from President Trump. The euro edged lower by 0.2% to $1.1706, while sterling slipped 0.2% to $1.3569. The Australian and New Zealand dollars each fell 0.2% after earlier gains were cut by renewed trade tensions and soft risk appetite.

Gold prices retreated more than 1%, falling to $3,307 per ounce, dragged down by firmer Treasury yields and a stronger dollar. US 10-year bond yields rose to a two-week peak, reducing the appeal of non-yielding assets. Trade optimism, particularly regarding ongoing discussions between the US and key partners, dampened demand for traditional safe havens. Analysts also pointed to the possibility that tariffs could delay Federal Reserve rate cuts, which may limit further upside for gold in the near term.

Oil prices eased slightly after touching two-week highs, with Brent crude down 0.1% at $70.08 a barrel and WTI crude also lower by 0.1% at $68.25. Weaker sentiment followed data from industry sources showing a potential 7.1 million barrel rise in US crude inventories. The US Energy Information Administration is due to confirm the numbers later today. Separately, the EIA revised its 2025 oil production forecast lower by 50,000 barrels per day, citing reduced activity among US producers due to price pressure.