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New: Introducing “Why Is It Moving?” - lightning-fast, AI-driven explanations of stock moves
A number of stocks fell in the afternoon session after President Donald Trump threatened to impose 'massive' new tariffs on Chinese goods.
In a post on his Truth Social network, Trump stated that his administration is calculating a 'massive increase of Tariffs on Chinese products.' Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The threat immediately impacted the market, with the tech-heavy Nasdaq sinking 2.4% and the broader S&P 500 falling 1.7%. Such tariffs could significantly disrupt the global supply chains that many technology companies rely on for manufacturing and components. The policy uncertainty also raises fears of retaliatory measures from China, which could impact sales in a key international market for many U.S. tech firms, leading to investor concern over future profitability.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
ACV Auctions’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 5.5% after an analyst at Needham lowered the company's price target. While Needham analyst Chris Pierce kept a "Buy" rating on the stock, the price target was reduced to $14.00 from $16.00. This move signaled a more cautious outlook. The negative sentiment was not isolated, as the average price target from nine analysts covering the company had decreased by nearly 18% over the previous three months. This adjustment followed a period of stock weakness, with the shares having recently touched a new 52-week low.
ACV Auctions is down 59.1% since the beginning of the year, and at $8.56 per share, it is trading 63.1% below its 52-week high of $23.17 from December 2024. Investors who bought $1,000 worth of ACV Auctions’s shares at the IPO in March 2021 would now be looking at an investment worth $273.92.
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