FEATURE

Freeport McMoRan

stock plummeted Tuesday, along with shares of other metals and mining companies, as commodities declined in a risk-off trade tied to U.S. military action in Iran.

Shares of the copper miner traded as low as $60.84 and closed at $65.57, down 4%. The

and

were down more than 2% at points in the day and closed down 0.9% and 0.8%, respectively.

Benchmark oil prices jumped about 4% by the end of the stock trading day, stoking fears of inflation and reduced economic activity. That is helping push down commodity prices. Copper was off 1.7% at $5.84 per pound. Gold and silver prices were down 3.8% and 6.8%, respectively.

Gold and silver are often considered haven assets, rising in times of stress. But the U.S. dollar is rising, which can take some of the momentum from commodities.

Whatever the reasons, it’s a perfect setup for mining stock declines.

Southern Copper

stock dropped 5.8%. Shares of gold miner

Newmont

lost 7.8%.

Starting points help explain the severity of the selloff. Coming into Tuesday trading, shares of Southern Copper, Freeport, and Newmont were up an average of almost 150% over the past 12 months. Investors might be protecting profits as geopolitical tensions ratchet higher.

There isn’t much company-specific news to pin declines on. And not everyone believes the selloff is justified.

Jefferies wrote Monday that metals and mining stocks should continue to outperform as the conflict creates supply chain risks, necessitating stockpiling of metals.

Stockpiling means extra demand.

That might help down the road, but for now, investors are thinking about risks, not rewards, arising from the conflict with Iran.

Write to Al Root at allen.root@dowjones.com