AI Stock Selloff and Election Impact Weigh on Copper

This week, copper hit a three-month low as anxiety over the artificial intelligence rally moved from equities to raw materials.

Copper dropped 3.2% on Tuesday to $13,883 per ton on the London Metal Exchange. It rebounded Wednesday, rising above $14,100 after the US midterm elections.

The metal has pulled back from its September peak of $14,875, prompting speculation that its record run may be fading.

What Is Behind the Copper Decline?

A pair of key factors are behind the downturn.

Firstly, the recent slump in AI stocks has undermined faith in the investment wave supporting data centres.

The metal is critical for electrical systems, which has made it a favoured bet linked to AI growth.

Ed Meir of Marex commented that copper seemed to be “catching up” with the recent selloff in semiconductors.

Secondly, the Democratic sweep of both congressional chambers has lowered the anticipated US tariffs on refined copper.

Earlier, tariff concerns had prompted traders to build copper inventories in the US, tightening availability elsewhere and boosting prices.

Ole Hansen of Saxo Bank cautioned that lower tariff expectations might weigh on copper values.

#Copper: The US election results have triggered a rollercoaster across financial markets, including copper. The AI and data centre rollout may now come under increased scrutiny, potentially dampening the demand outlook from this particular sector. Overall, however, I believe the…

— Ole S Hansen (@Ole_S_Hansen) November 4, 2026

What Is Copper's Current Trading Status?

The unexpected aspect is that demand for physical copper stays fairly robust.

The Yangshan copper premium in China, which gauges demand for imported metal, is still around $200 per ton, a level not seen in over ten years.

At the same time, Chinese warehouse stockpiles have dropped over 75% within six months.

Investors are offloading copper due to economic worries, even as physical buyers vie for scarce inventory.

What Is the Outlook for Copper Prices?

Prices are still in a descending channel after their uptrend line was broken.

The $6.31 per pound zone represents key support, close to the July low.

A daily settlement beneath that level could pave the way to $6.11 and possibly $5.91.

A durable recovery would put resistance near $6.70 back in play.

Notwithstanding the near-term softness, J.P. Morgan predicts copper will average $14,800 per ton in Q4, underpinned by supply limitations.

The coming challenge is whether Chinese consumption can offset diminishing faith in AI spending.