Please ensure Javascript is enabled for purposes of website accessibility

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

By Rich Smith - Updated Apr 14, 2021 at 3:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's springtime, and there's the smell of infrastructure in the air.

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 (AA 2.75%) closing 6.9% higher, U.S. Steel (X 1.97%) rising 7.3%, and Freeport-McMoRan (FCX 2.92%) gaining 8%.

You can probably thank President Joe Biden for that.

Three colorful arrows racing straight up on a black background

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.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

United States Steel Corporation Stock Quote
United States Steel Corporation
X
$24.89 (1.97%) $0.48
Freeport-McMoRan Inc. Stock Quote
Freeport-McMoRan Inc.
FCX
$31.39 (2.92%) $0.89
Alcoa Corporation Stock Quote
Alcoa Corporation
AA
$53.12 (2.75%) $1.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
403%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.