Freeport-McMoRan vs S&P 500
Freeport-McMoRan (FCX) is the closest single-stock proxy for global copper demand, and its relationship to the S&P 500 is the cleanest equity-market read on the AI-driven copper supercycle that pushed LME copper to $12,000 per ton in late 2025. FCX rose roughly 34% year-to-date through Q4 2025, materially outperforming the broader S&P 500 even before the Grasberg September 2025 mudslide cut 2026 copper sales guidance to 3.1 billion pounds from 3.4 billion.
Also known as: Freeport-McMoRan (FCX) (STK_FCX, Freeport) · S&P 500 ETF (SPY) (ETF_SPY, S&P 500, SPX, SP500)
Why This Comparison Matters
Freeport-McMoRan (FCX) is the closest single-stock proxy for global copper demand, and its relationship to the S&P 500 is the cleanest equity-market read on the AI-driven copper supercycle that pushed LME copper to $12,000 per ton in late 2025. FCX rose roughly 34% year-to-date through Q4 2025, materially outperforming the broader S&P 500 even before the Grasberg September 2025 mudslide cut 2026 copper sales guidance to 3.1 billion pounds from 3.4 billion. The pair encodes whether industrial-metal demand or financial-conditions liquidity is the dominant equity driver, and the Morgan Stanley April 2026 downgrade flagged the next regime question: is the copper supercycle financial or physical?
Why this specific pair is watched
FCX is the largest pure-play copper miner in the S&P 500 and the highest beta single name to LME copper prices in the index. Macro desks at Morgan Stanley Materials Research and Goldman Sachs Metals & Mining track FCX-versus-SPY because the spread isolates copper-cycle leadership within US equities in a way that broader sector ETFs (XLB, COPX) cannot. Morgan Stanley's April 2026 downgrade, citing the Grasberg sales-guidance cut and questioning the supercycle pricing, is the kind of single-name event that the pair encodes immediately while broader sector indices smooth it out.
The historical breakpoint is the 2010-2011 commodity supercycle. FCX peaked at $61.35 (split-adjusted) in January 2011 against an S&P 500 at 1343, a ratio of 0.046. By February 2016, after copper's collapse from $4.50 per pound to $1.95, FCX bottomed at $3.52 versus an S&P 500 at 1810, a ratio of 0.0019, a 96% destruction in the relative ratio. That episode established the modern template: when copper is the binding macro constraint, FCX leads SPY by 6 to 18 months at turning points; when copper is a passive participant, FCX moves with broader value-cyclical factors and the ratio compresses.
Historical relationship and structural breaks
FCX has a long-run beta to the S&P 500 of approximately 1.6 (15-year regression through April 2026), but its idiosyncratic loading on LME copper makes the pair more informative than the beta alone. The 2008-2011 supercycle drove FCX from $7.32 in November 2008 to $61.35 in January 2011, an 738% rally against an S&P 500 that returned 76% over the same window. The 2014-2016 commodity collapse reversed it: FCX fell 89% from May 2014 peak to January 2016 low while the S&P 500 declined just 11% over the same window, the largest sustained FCX-SPY divergence in the modern record.
The structural break is grade decline at the world's major copper mines. Codelco's average ore grade dropped from 0.91% in 2010 to 0.62% in 2024 per company technical reports, and BHP's Escondida grade fell from 1.04% to 0.78% over the same window. Lower grades mean higher capex per pound and structurally tighter supply, which is the supercycle thesis Goldman Sachs published in October 2024. The Grasberg September 2025 mudslide is the acute version of the same structural problem: Freeport now expects approximately 65% of Grasberg nameplate capacity in H2 2026, down from 85% prior, with full recovery not anticipated until late 2027.
How the Convex composite indices read this pair
Conditional Forward Response (Tail Events)
How S&P 500 ETF (SPY) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in Freeport-McMoRan (FCX). Computed from 1,281 aligned daily observations ending .
Following these triggers, S&P 500 ETF (SPY) falls 0.08% on average over the next 5 sessions, versus an unconditional baseline of +0.23%. 129 qualifying events; S&P 500 ETF (SPY) closed positive in 54% of them.
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Frequently Asked Questions
Why has FCX outperformed the S&P 500 in 2025-2026?+
LME copper rose to $12,000 per ton in December 2025 on AI data center demand (2,000-4,000 tons per hyperscaler per Goldman Sachs), the energy transition (60-83 kg copper per EV per IEA), and grid expansion. FCX's 34% YTD return reflects this supercycle thesis and the Grasberg September 2025 supply disruption. The S&P 500 returned about 15% on EPS growth over the same window.
What did the Grasberg mudslide do to FCX?+
The September 2025 mudslide halted production and cut FCX's 2026 copper sales guidance to 3.1 billion pounds from 3.4 billion, a 9% reduction. FCX now expects approximately 65% of Grasberg nameplate capacity in H2 2026, down from a prior 85% estimate, with full recovery not anticipated until late 2027.
Why did Morgan Stanley downgrade FCX in April 2026?+
Morgan Stanley cited the Grasberg sales-guidance cut and questioned whether the copper supercycle is physical or financial. The downgrade implies a bet on either CNLI compression or CRAI rollover, both of which would pull FCX back toward its historical mean ratio versus the S&P 500.
How does FCX behave during recessions?+
FCX historically falls more than the S&P 500 during recessions because copper demand is industrial. The 2014-2016 commodity collapse cut FCX 89% versus an S&P 500 decline of 11%. The 2008 GFC cut FCX from $61 in mid-2008 to $7.32 in November 2008, an 88% drawdown versus an S&P 500 drawdown of 57%.
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