U.S. equities declined across the board overnight, with the S&P 500 slipping 0.69% to 7,691.76, the Nasdaq Composite dropping 1.33% to 26,289.71, and the Dow Jones Industrial Average easing 0.22% to 53,343.4. The Philadelphia Semiconductor Index suffered its steepest one-day fall since July 29, tumbling 6% to 11,864.18, as chipmakers led the selloff.
Memory chip manufacturers were hit particularly hard, with SanDisk falling 9.01%, Seagate down 9.16%, Western Digital losing 7.43%, and Micron sliding 7.02%. The optical communications sector also saw sharp pullbacks, with Applied Optoelectronics plunging 15.16%, Coherent dropping 12.75%, Lumentum shedding 9.87%, and Corning off 7.68%. ARM declined 6.67%, Intel fell 6.58%, AMD lost 4.27%, and Nvidia slipped 2.34%.
AI cloud service providers faced intense selling pressure, with CoreWeave dropping 12.10%, TeraWulf down 11.25%, and Nebius falling 7.60%. In commodities, spot gold slid 1.86% to $4,334.17 per ounce, while spot silver tumbled 3.74% to $63.30 per ounce.
Trump Denies Any Negotiations with Iran
According to state media reports, President Trump posted on his social media platform "Truth Social" on August 18 that no talks are currently underway with Iran, nor are any planned for the future. Trump stated that the U.S. maritime blockade against Iran remains fully effective, noting that the Strait of Hormuz stays open and operational with all mines cleared or detonated. Iran has not yet responded to these remarks.
White House Pauses Contact with Tehran
A U.S. official revealed on Monday that Trump has instructed his negotiation team—which includes Vice President Vance, special envoy Witkoff, and Trump's son-in-law Kushner—to suspend all engagement with Iranian officials for the time being.
UAE Suspends All Trade and Financial Ties with Iran
The UAE Foreign Ministry announced in the early hours of August 19 that, given the continued escalation of regional tensions undermining international peace and security, it has decided to halt all trade, commercial activities, and financial transactions with Iran until further notice. Afra Al Hamili, the ministry's director of strategic communications, dismissed allegations regarding the state of UAE-Iran economic relations, reaffirming the UAE's commitment to promoting regional peace, stability, and prosperity through dialogue, cooperation, and regional integration, while emphasizing continued dedication to preserving the integrity of the international financial system.
What Lies Ahead for Copper Prices?
On Monday, three-month copper on the LME touched an intraday high of $14,396 per tonne, approaching the record peak of $14,527 set in late January. Data from SMM shows LME copper inventories rose by 15,700 tonnes to 223,600 tonnes on August 17, an increase of 7.57%, driven largely by 17,500 tonnes of new arrivals that day. Registered warrants climbed to 123,100 tonnes as of August 17, up 20,000 tonnes from August 14, while the proportion of cancelled warrants declined.
"Copper prices have maintained an upward trend this week with rising open interest," noted Zhou Xiao'ou, head of non-ferrous metals research at Zijing Tianfeng Futures. The LME copper market is currently experiencing a notable physical squeeze. After 42 consecutive sessions of inventory declines, LME stocks have fallen from over 400,000 tonnes at the start of the year to around 205,000 tonnes, despite a slight rebound on Monday. Cancelled warrants still account for roughly 50% of total inventory, leaving only about 100,000 tonnes of registered warrants available for delivery—only slightly above global daily consumption.
"The LME copper inventory decline has paused with a modest uptick, and the cancelled warrants ratio has retreated, indicating a temporary easing of the extreme squeeze expectations. Market sentiment has shifted from tension to cautious观望," said Gu Fengda, chief analyst at Guosen Futures. Meanwhile, the LME copper Cash-3M spread has reached its widest premium since the 2021 squeeze event.
Zhou believes the current LME copper situation is not a traditional single-institution bear squeeze but rather a passive physical squeeze driven by policy arbitrage redistributing global inventories alongside depleted exchange deliverable stocks. "Domestic copper supply is also showing signs of tightening. Treatment charges for copper concentrate remain deeply negative, approaching -$200 per tonne, while sulfuric acid prices have retreated from highs to around 1,200 yuan per tonne. Additionally, invoice issues with recycled anode copper have forced smelters to adjust their recycled material inputs, significantly reducing overall feed volumes, with several domestic smelters cutting production—a trend expected to persist through Q4," Zhou explained.
The squeeze effect in overseas non-U.S. markets is also impacting domestic supply. Zhou noted that some cargoes destined for China are being redirected to Southeast Asian warehouses. With the U.S. market continuing to absorb global copper resources, spot supplies in overseas non-U.S. markets remain tight, constraining China's total refined copper supply. "On the demand side, improvement expectations exist. The 'golden September, silver October' peak season is approaching, copper inventories are expected to decline, and the futures market's back structure may persist through year-end," Zhou added.
Gu Fengda attributes the current copper price rally primarily to macro expectation repairs and supply constraints. From a macro perspective, weakening U.S. employment data has cooled expectations for aggressive Fed rate hikes, while the U.S. dollar index trades in a weak range, opening room for valuation recovery in dollar-denominated metals. Domestic policy expectations are also improving, supporting long-term demand from major copper consumers such as power grids and new energy sectors. On the supply side, insufficient global copper mine capital expenditure continues to show, with output growth stalling in major producers like Chile and Peru. Combined with mine closures, smelting accidents, and extreme weather disruptions, the copper concentrate supply shortage is intensifying. Imported spot TC remains deeply negative, and domestic social inventories of electrolytic copper and bonded warehouse stocks are at multi-year seasonal lows.
Looking ahead, Zhou believes that while total physical copper supply is not in extreme shortage, liquid inventories available for LME delivery and even domestic spot markets are being continuously drained, creating exchange-level scarcity and triggering passive physical squeezes. The biggest variable remains U.S. tariff policy. Until relevant policies are implemented, the supply-demand dilemma in the copper market remains unresolved. With strong bullish sentiment prevailing, long positions across LME, COMEX, and SHFE remain active, and copper prices could challenge historical highs. She cautioned, however, that once U.S. tariffs are imposed, copper prices would likely plummet on a "buy the rumor, sell the fact" dynamic. Therefore, while copper retains upward momentum, risks have increased significantly, and investors should avoid chasing highs recklessly, instead focusing on entry opportunities after pullbacks with prudent position management.
As of this morning's close, LME three-month copper traded down over 1% at $13,986.5 per tonne.