Good morning, investors. The trade war isn’t just rattling the stock market — it’s going after commodity markets too. Today’s edition unpacks what industry veterans are seeing with the latest rally in “Dr. Copper,” one of the most-watched metals in the world.

Copper’s predictive power

A classic economic indicator is flashing red but not for the usual reasons. 

On Tuesday, the day after rolling out blanket tariffs on a slate of countries, President Trump said the US would put a 50% tariff on copper.

Prices for the metal surged more than 10% to an all-time high. 

“Today, we’re doing copper,” he said during a Cabinet meeting at the White House. “I believe the tariff on copper, we’re going to make it 50%.” 

Economists like to call the commodity “Dr. Copper” because it provides insight into the health of the economy. But this rally — the largest one-day gain in copper prices since at least 1968, per Dow Jones data — is less about booming demand and more about the trade war.

“This is a significant distortion,” Mike McGlone, senior commodity strategist at Bloomberg Intelligence, told Opening Bell Daily. “When copper rallies, it’s usually a great sign [for the economy]. But this could have the opposite effect. It could curtail demand and incentivize more supply.”

McGlone, who has worked in commodities for three decades, noted that the distortion is primarily showing up in US markets. The domestic price traded 25% above prices in London on Tuesday, the widest spread on record. 

Meanwhile, copper’s 180-day volatility hit 28% in the first half of the year, which marks its highest since 2012.

The metal is now trading more than $1 above its prior year-end record close of $4.56 in 2021, a level that proved unsustainable even during the post-pandemic boom. 

Copper has climbed roughly 37% so far this year for its strongest run since the Great Recession. Yet the metal is out of sync with economic conditions: 

• China is grappling with deflation

• US construction activity and builder sentiment have softened

• The global economic outlook remains fragile

“Copper is a real-time indicator of the Chinese economy, as the country consumes about 60% of the world’s supply,” Gene Goldman, CIO of Cetera Investment Management, told Opening Bell Daily. 

He added that a weaker US dollar, better-than-expected jobs data, and global central bank stimulus have also contributed to the metal’s rise. 

It’s also worth mentioning that the Atlanta Fed still projects robust US growth for the second quarter.

In any case, Goldman and McGlone both suggested that copper’s price surge may prove short-lived.

“I expect anyone who uses copper — automotive, builders — will push back on the tariffs,” McGlone said. “It makes it difficult for US businesses that use copper to do business.”

Market snapshot

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Elsewhere

🚒 Ukraine could soon get more US military support. The White House is weighing whether to send more air-defense systems to Kyiv, and it would mark the first time Trump has approved providing major weapons beyond those already authorized by the Biden administration. (WSJ)

🤝 Trump said he won’t extend tariff deadline past August 1. There will be no more leeway for countries who can’t make a deal with the US by that date, the president said Tuesday: “All money will be due and payable starting AUGUST 1, 2025 - No extensions will be granted.” (Yahoo Finance)

📊Americans suddenly feel better about inflation. New data from the NY Fed showed consumers’ outlook for the economy improved in June. Median inflation expectations for the year ahead fell by 0.2% to 3%, marking the second month of declines in a row. (Barron’s)

🏦 Supreme Court rules Trump can proceed with government staff cuts. The White House will now be able to move forward with large-scale reductions in force at federal agencies, even as lower-court proceedings will continue to block those efforts. One of the nine Supreme Court members dissented on the ruling. (CNBC)

Rapid-fire

• Elon Musk told Wedbush strategist Dan Ives to “shut up” after he posted recommendations for Tesla’s board on X (CNBC)

• President Trump said Russia’s Putin feeds the US “bullshit” about ending the war in Ukraine (WSJ)

• Amazon could bring in $21 billion in sales during its Prime Day event that now lasts 96 hours (Yahoo Finance)

• A White House economist compared the likelihood of tariff-fueled inflation to a meteor strike (CNBC)

• A new S&P 500 ETF debuted for public trading that excludes companies with “DEI hiring targets” (Newswire)

• Anthony Pompliano’s bitcoin treasury company is trading at one of the lowest implied mNAV premiums in the market (Pomp Letter)

• President Trump’s new tariffs could push Fed rate cuts back even more (Opening Bell Daily)

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Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

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