Chile Stocks Rebound 0.43% on Closing Auction Surge After Court Kills Tariffs

Chilean equities closed Friday with a welcome rebound as the S&P CLX IPSA rose 0.43% to 10,855.49 — snapping a three-session losing streak that had dragged the index from 10,911 down to 10,812 by Thursday’s close. The weekly return came in at −0.39%, limiting the damage from a volatile stretch driven by external headwinds and SQM-related pressure earlier in the month.

Friday’s session was a tale of two halves. For most of the day the IPSA traded below Thursday’s close, hitting an intraday low of 10,745.67. But the closing auction — the mechanism through which official closing prices are determined in Santiago — delivered a sharp late surge that carried the index to 10,855.49, near the session high of 10,866.91. The catalyst was the US Supreme Court’s 6–3 ruling against IEEPA tariffs, which reached the market during Chilean trading hours and triggered a wave of risk-on positioning.

The IPSA remains well below its all-time high of 11,721.38 set on January 28, sitting roughly 7.4% off that peak. The broader correction from the late-January highs has been driven by a confluence of factors: the Tianqi-SQM overhang, a Latam Airlines secondary offering, and softening copper prices amid the Chinese New Year holiday. Looking at year-to-date returns, the IPSA is still up over 5% in 2026 thanks to the powerful rally that opened the year.

The peso lost ground to the dollar for a second consecutive session on Friday, with USD/CLP closing at $867.70 — up 0.32% from the prior day’s $864.89. The opening was at $864.48, and intraday the pair traded between roughly $861.58 and $868.48, with the late push reflecting dollar demand ahead of the weekend. On the week, the greenback gained 0.79% against the peso.

The dólar observado — the official reference rate published by the Banco Central based on the prior day’s interbank transactions — was $868.24 for February 20, up from $863.29 the day before. The peso’s weekly softness coincided with a 1.5% decline in copper on the LME to roughly $5.73/lb, pressured by reduced Chinese participation during Lunar New Year holidays and rising LME inventories.

Despite the short-term weakness, the peso remains approximately 8.5% stronger year-on-year, reflecting the structural support from elevated copper prices, a favorable terms-of-trade dynamic, and the BCCh’s measured monetary stance. The central bank held the TPM at 4.50% at its January 27 meeting after cutting 25bps in December 2025, and markets expect the rate to remain unchanged near the neutral level through mid-2026. Cochilco’s 2026 copper price forecast of US$4.95/lb provides a constructive floor for the peso outlook.

The daily chart shows the IPSA closing at 10,855.08 (BCS feed) after a moderately bullish session (O: 10,809.15 / H: 10,866.91 / L: 10,745.67 / C: 10,855.08), with the close near the top of the range — a constructive signal following three consecutive red candles. The index is well above the 200-day SMA at 9,320.84, confirming the long-term uptrend remains firmly intact despite the correction from the January highs.

The RSI reads 48.73/41.63 on the dual-period setup, placing the index in neutral territory after the pullback from overbought levels near 80 in late January. The MACD is bearish at 29.76 (signal: −51.07, histogram: −80.82), confirming downward momentum is still in play despite Friday’s bounce. Bollinger Bands are contracting, which typically precedes a directional breakout — the question is whether the SCOTUS-driven bounce can generate follow-through above the 10,900–10,940 resistance cluster.

Friday was a whiplash session for global markets. US Q4 GDP came in at just 1.4% annualized — sharply below the 2.8% consensus — largely due to the impact of the government shutdown, sending stocks lower in early trade. But the US Supreme Court’s 6–3 decision striking down most of Trump’s 2025 tariffs triggered a swift reversal, with the S&P 500 recovering to close up 0.69% at 6,909.51 and the Nasdaq gaining 0.90%.

For Chile, the tariff ruling carries particular weight. The IEEPA framework was the legal basis for proposed copper tariffs that had weighed on the sector since mid-2025. With the court declaring the act does not authorize tariffs, a key overhang on Chilean mining exports has been lifted — though the administration could seek alternative legal pathways. In the commodity space, Brent crude surged to $71.30/bbl on Trump’s Iran rhetoric, while gold rallied 1.67% to $5,080.90/oz as haven demand intensified.

Copper was the outlier, falling roughly 1.5% on the LME amid reduced Chinese participation during the Lunar New Year holiday (Shanghai Futures Exchange closed Feb 16–23) and a 4.6% jump in LME inventories to 221,625 tonnes. PCE inflation for December came in at 2.9% year-on-year in the US, above the 2.8% consensus, keeping the Fed on hold. The DXY edged down 0.16%, but the dollar still gained against commodity-linked currencies including the peso.

The return of the Shanghai Futures Exchange from holiday on February 24 will be the most immediate catalyst for copper and, by extension, the peso. A week of pent-up Chinese demand could push the metal back toward the $5.90–$6.00/lb range and provide a tailwind for the peso below $860. Conversely, any signs of weak post-holiday demand would keep copper pressured and the dollar bid above $870.

The Iran situation remains a wildcard. Trump’s self-imposed ten-day deadline for a nuclear deal puts the decision window in the coming week. Any military escalation would spike oil prices — a net negative for Chile as a crude importer — while boosting gold and safe-haven flows. The Supreme Court tariff ruling opens a more favorable medium-term backdrop for Chilean exporters, but near-term implementation uncertainty persists.

Domestically, the BCCh’s next monetary policy meeting on March 18 will be closely watched for signals on whether the central bank sees room for a further 25bps cut from 4.50%. January CPI data and the Q4 IMACEC reading will be key inputs. On the equities side, the IPSA’s correction from 11,721 to the 10,800 zone has compressed valuations, and a reclaim of the 10,900–10,940 resistance area would signal the pullback is over.

Friday’s closing-auction reversal broke a three-day losing streak and offered a technical reprieve, but the IPSA’s broader correction from the January highs remains intact. The index sits 7.4% below its all-time high with neutral RSI readings and a bearish MACD, suggesting this is consolidation rather than the start of a new leg higher. The key to the next move lies offshore: a resumption of copper demand post-Lunar New Year and clarity on Iran could push the IPSA back above 10,900, while continued commodity softness and geopolitical escalation would test the 10,700–10,750 support zone. The peso’s fate is similarly tied to copper’s trajectory, with $860–$875 the likely range for USD/CLP in the near term. Near-term range: IPSA 10,700–10,940; USD/CLP $858–$875.

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