Send me real-time posts from this site at my email

Why Alcoa, United States Steel, and Freeport-McMoRan Stocks Surged Today

What happened

On a down day for the S&P 500 as a whole, metal production stocks fared better than most Wednesday, with shares of Alcoa (NYSE: AA) closing 6.9% higher, U.S. Steel (NYSE: X) rising 7.3%, and Freeport-McMoRan (NYSE: FCX) gaining 8%.

You can probably thank President Joe Biden for that.

Image source: Getty Images.

So what

The president, as you've probably heard, has proposed that Congress pass a $2 trillion infrastructure bill to rebuild the nation's roads and bridges, water supply systems, electric grid, and even telecommunications systems. And as The Boston Globe noted this week, getting this bill passed has become the Biden administration's singular focus. "Biden and the Senate have effectively cleared their plate for this single item from now until September, when the Senate, they hope, will try to pass it under the rules of a budget reconciliation process," the Globe reports.

Passage of the bill is not a sure thing. Although the Globe noted "polls suggest broad support for Biden's plan," support for the bill among Republicans in Congress seems tepid at best.

Now what

That being said, if the bill does pass, Recycling Today magazine predicted earlier this month that the massive projects being envisioned will "likely require hundreds of thousands of tons of steel, copper, aluminum and other basic materials."

Even those words may fail to capture the full size of this bill. The American Iron and Steel Institute predicts that for each $1 billion spent on infrastructure, American metals producers will need to put out "about 50,000 net tons of steel" -- to say nothing of the massive quantities of copper and aluminum that will be required.

Is that reason enough for shares of Alcoa, U.S. Steel, and Freeport-McMoRan to be surging today? I think it may be.

10 stocks we like better than United States Steel
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and United States Steel wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of February 24, 2021

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue