The Daily Beat - December 26, 2025 📈

There were no S&P 500 earnings reactions on Wednesday, but we want to tell you about one of the hottest materials stocks in the market right now.

For the better part of two years, Alcoa $AA conditioned investors to expect the worst. 

The stock recorded 10 consecutive negative earnings reactions, one of the longest losing streaks in its history, and sentiment collapsed as every report became another excuse to sell first and ask questions later. 

That’s what makes the latest turn so important. 

When expectations are thoroughly washed out, it doesn’t take perfection to change the narrative, just evidence that the cycle has turned.

That shift showed up immediately in the earnings reactions. 

After snapping that historic losing streak last quarter, Alcoa just followed up with its strongest post-earnings move in years, surging more than 12% on the day.

The reaction wasn’t random or emotional; it was a repricing. 

After years of negative reactions, the market finally rewarded improving fundamentals, signaling that sentiment around earnings has changed in a durable way. 

These types of inflections tend to matter, especially when they occur after extreme pessimism.

And the fundamental backdrop supports the move. 

Alcoa is the largest publicly traded aluminum company, supplying bauxite, alumina, and aluminum to the automotive, aerospace, construction, and energy infrastructure sectors. 

In the latest quarter, production improved, costs declined, and profitability surged as higher aluminum prices and a sharply higher Midwest premium were reflected in results. 

Management continues to rationalize higher-cost capacity, strengthen the balance sheet, and focus capital on its most competitive assets, precisely what you want to see as the cycle turns higher.

The price is now confirming what the earnings reactions suggested.

After years of choppy, frustrating action, AA has broken out to new multi-year highs, resolving a prolonged accumulation pattern and entering what appears to be the early stages of a brand-new primary uptrend. 

Importantly, this breakout is coming after a sentiment reset, not after euphoric optimism.

That’s why we see this as a fresh trend reversal, not an exhausted move. 

Earnings reactions have flipped, fundamentals are improving, and the stock is finally responding the way leadership stocks do. 

Based on the technicals and fundamentals, we expect the path of least resistance for AA to remain higher for the foreseeable future.

Happy Friday!

-The Beat Team