Shares of Alcoa Corp. are experiencing their largest decline in 10 months as concerns grow over the possibility of a trade war with China if Donald Trump is elected president in November.
Stock Selloff in Metals and Mining Sector
In afternoon trading, shares of the aluminum producer (stock symbol: AA) plummeted by 8.7%, leading a widespread selloff in the metals and mining industry. This marks the biggest one-day decline since March 15, 2023, when the stock fell by 10.8%. Over the past five days, Alcoa’s stock has declined by 12.4%.
Impact on SPDR S&P Metals & Mining ETF
The SPDR S&P Metals & Mining exchange-traded fund (symbol: XME) also took a hit, dropping by 2.6%. Of its 33 equity components, 31 experienced losses.
Trade War Fears Triggered by Trump’s Statement
The selloff was triggered by Donald Trump’s statement on Fox News’ “Sunday Morning Futures” program. Trump mentioned that tariffs on goods from China could potentially be higher than the previously reported 60%.
Previous Impact of Tariffs on Aluminum
When the Trump administration announced tariffs on imported aluminum and steel in March 2018, Alcoa’s stock suffered a significant decline.
From the archives (July 2018): Alcoa CEO explains why aluminum tariffs are hurting, not helping
In 2018, Alcoa’s stock experienced a sharp drop of 50.7%, marking its second-worst annual performance since 1972. The metals and mining ETF also tumbled by 28% that year, in contrast to the S&P 500’s decline of 6.2%.
Other Companies Affected in Metals and Mining Sector
Several other prominent companies in the metals and mining sector also saw declines:
- Freeport-McMoRan Inc. (stock symbol: FCX) shares dropped by 3.7%
- Newmont Corp. (stock symbol: NEM) shares gave up 2.4%
- Hecla Mining Co. (stock symbol: HL) shares slid by 4.4%
- Cleveland-Cliffs Inc. (stock symbol: CLF) shares slumped by 2.6%
- Uranium Energy Corp. (stock symbol: UEC) shares were down by 1.5%
Newmont’s stock is set to reach its lowest closing price since May 2019, while Hecla Mining shares may close at a four-month low. Uranium Energy’s stock, on the other hand, is just two days removed from its 17-year closing high of $8.20 on Feb. 1.
