News

Key Takeaways

Major U.S. equities indexes were mixed on the first day of the new trading week, with stocks wavering after President Donald Trump threatened to impose an additional 50% levy on China if the Asian nation fails to rescind its 34% retaliatory tariff on U.S. goods.

Following dramatic swings driven by shifting developments in the trade conflict, the S&P 500 ended the session 0.2% lower. The Dow dropped 0.9%, while the Nasdaq eked out a daily gain of 0.1%.

Tractor Supply Co. ( TSCO ) shares sank 5.8%, losing the most of any stock in the S&P 500. The retailer of rural lifestyle products has pointed to its past success in adapting to tariffs during Trump's first presidential term, which its CEO said involved a roughly even split of the burden between the company itself, supplying manufacturers, and price increases for customers. While the company imports a relatively limited amount of the products it sells, a significant amount of those imports come from China. At the same time, tariffs on materials like steel and aluminum could also add to price pressure.

Shares of tool manufacturer Stanley Black & Decker ( SWK ) dropped 5.7%. Monday's decline extended losses posted last week following Trump's tariff announcement. With a significant production footprint in Asia, Stanley could see a major impact from the intensifying trade conflict. During its latest earnings call, the company's chief financial officer (CFO) estimated a potential net tariff impact of $10 million to $20 million in 2025, but he indicated that the company would implement countermeasures, including supply chain adjustments and pricing measures.

Homebuilder stocks lost ground, reversing some of the strong gains posted late last week as the broader markets tumbled. In addition to signs of a possible reprieve in interest rates, the exemption of lumber imports from Canada contributed to enthusiasm around the homebuilding sector on Friday. However, the National Association of Home Builders (NAHB) indicated that tariffs on other key materials could still contribute to price increases for homes around the country. Shares of D.R. Horton ( DHI ), PulteGroup ( PHM ), and NVR ( NVR ) all declined roughly 5% on Monday.

Shares of companies exposed to artificial intelligence (AI) technology staged a partial recovery from the tariff-driven selloff. Analysts at Bernstein said that, while it is difficult to predict how long or deep the market downturn may turn out to be, they maintain their belief in the underlying AI story. Shares of AI server maker Super Micro Computer ( SMCI ) jumped 10.7%, notching the top performance of any S&P 500 stock, while shares of other AI players also pushed higher.

Dollar Tree ( DLTR ) shares jumped 7.8% after Citi upgraded the discount retailer's stock to "buy" from "neutral." Analysts noted that Dollar Tree could have the flexibility to raise its prices as tariffs affect global supply chains, suggesting that the company's stores could lift price tags to $1.75 from current levels of $1.25 without encountering significant pushback. Citi's team also recalled that when Dollar Tree initially moved past the $1 price point several years ago, the company saw sales growth and a boost in its EBIT margin.

Shares of Texas Pacific Land ( TPL ), which owns major acreage in the oil-rich Permian Basin, added 6.9%. Emerging from the bankruptcy of a railroad company in the 19th century, the land trust has been exploring opportunities to diversify its revenues, including water sales, easements, and even cryptocurrency mining projects.

Read the original article on Investopedia