Copper and the Yield Curve Agree on One Thing
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Copper is the biggest positive driver of the S&P 500 right now, and sensitivity is rising.
Quant Insight's Macro Factor Equity Risk Model (MFERM) reveals the exposure sits in Technology, not Materials or Industrials.
Break Technology down and the split sharpens.
Semiconductors and Hardware carry the copper exposure.
Software drags.
AI CapEx is why: data centre buildouts, power infrastructure, cooling systems and grid upgrades are all copper-intensive.
The same fault line appears in yield-curve analysis:
Semis hit hardest by the back-up in 30-year yields.
Software a relative winner.
Same "Tech" label, opposite macro books.
This is why multivariate factor analysis matters. Copper alone doesn't show semis' yield-curve exposure. The curve alone doesn't show copper. Only running both does.
The real risk: higher 30y yields without copper holding up, that flips both exposures against semis at once. Software carries neither.
Sector labels hide macro risk. MFERM shows which.
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