President Trump’s New Tariff Threat Hurts Stock Prices

The president’s latest trade bombshell lobbed at Mexico sent investors scurrying for cover.


3 min read

Opinions expressed by Entrepreneur contributors are their own.


Stock prices were down sharply after the President, a self-described “tariff man,” threatened via Twitter to impose a five percent tariff on all imports from Mexico unless “the illegal immigration problem is remedied.” The White House later issued a statement saying that unless Mexico “substantially stops” the number of illegal entrants across the southern border, the tariff would increase to 25 percent by October.

The Dow index was down 1.41 percent while the S&P 500 and Nasdaq composite indexes fell 1.32 percent and 1.51 percent respectively. The Entrepreneur Index™ closed the day 1.55 percent lower.

The President’s threat exacerbated fears about slowing global economies and sent interest rates and the price of oil plummeting. The yield on the 10-year Treasury bond fell more than points to 2.13 percent and oil dropped 5.7 percent to $53.37 per barrel.

Gap Inc. had the biggest loss on the Entrepreneur Index™, falling 9.32 percent after reporting financial results late yesterday. The retailer missed earnings and revenue estimates and saw same-store sales under its Gap brand fall a staggering ten percent in the quarter. It’s Old Navy brand, which Gap plans to spin-off next year, also struggled with same-store sales down one percent. CEO Art Peck called the quarter “extremely challenging” and blamed everything from bad weather, to lower tax refunds to a late Easter, as well as the company’s own poor performance. The stock set a new 52-week low today and is down 27.5 percent this year.

Losses were bad across most sectors of the market. Outside of the REITs, Dollar Tree Inc., up 3.34 percent, was the only stock on the Entrepreneur Index™ with a gain of more than one percent. The discount retailer jumped smartly again today after reporting better than expected financial results yesterday.

The automotive sector took a hit from the Mexican tariff threat. The big automakers all have production facilities in Mexico and source parts and components there. Ford Motor Co. was down 2.26 percent and truck-maker PACCAR Inc. fell 3.26 percent.

Alexion Pharmaceuticals dropped 5.65 percent. Shares in the drug-maker fell 16.3 percent in May, though they are still up 16.8 percent on the year. Asset managers Franklin Resources (-3.37 percent) and BlackRock (-2.59 percent) both fell sharply with the market volatility.

All thirteen technology stocks on the Entrepreneur Index™ were down today. Facebook, off 3.05 percent, had the biggest decline in the sector.

Oil and gas producer Hess Corp.was down 3.34 percent after the price of oil fell nearly six percent today. The stock is still up 37.9 percent this year but has fallen 16 percent in the last ten days.

The REITs were the only somewhat bright spot in the market. Essex Property Trust (2.2 percent) and Extra Space Storage (1.42 percent) had the biggest gains of the nine REITs on the Entrepreneur Index™.

The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.

Source

more recommended stories

  • 10 Entrepreneurs Who Are Showing Why Blockchain Is Here to Stay

    Thinking of jumping into this new.

  • There’s Growing Evidence Cannabis Helps Older Adults Keep Their Jobs for Years Longer

    Adults 65 and older are embracing.

  • The Fed Gave the Stock Market What It Expected, but Not What President Trump Wanted

    Plus, Adobe Inc. is up big.

  • The Number One Reason Women Entrepreneurs Should Look to Support Each Other

    The CEO of this fertility coverage.

  • Investors Optimistic for President Trump and Chinese Leader Xi Jinping’s Meeting Next Week

    NVIDIA Corp. soars on hopes for.

  • How Illinois Became the Only State to Legalize Weed Sales Without a Referendum

    Illinois lawmakers managed to pass a.

  • How Industrial-Scale Extraction Will Make CBD Accessible to Everyone Who Needs It

    A Kentucky company is working on.

  • Elon Musk Says He’s Through With Twitter, as Facebook and Tesla Drive Entrepreneur Index Higher

    Facebook is getting a rousing welcome.

  • 7 Ways to Deal with Anxiety on the Job

    If you’re seriously stressed at work,.

  • Helping Dads Discover Medical Cannabis This Father’s Day

    Many seniors, maybe including your own.

  • Diversify Your Marketing Portfolio With These Digital Assets

    Choose from curated fonts, graphics, templates,.

  • 5 Keys to Successfully Leading a Family Business

    Family businesses aren’t always easy, but.

  • No One Knows It But These 3 Industries Now Depend on AI

    AI is revolutionizing industries across the.

  • Being an Influencer is Not a Job

    Here’s how influencers have evolved to.

  • Why Mood-Based Cannabis Products Are About to Blowup

    Cannabis can be consumed to achieve.

  • Facebook Stock Rises as Company Prepares to Unveil Its Cryptocurrency

    The tech giant’s cryptocurrency reportedly has.

  • ‘I’m Fighting for Paternity Leave — So Should You’

    Supporting men as caregivers is a.

  • Cannabis Companies Embrace Pride Month

    In a month to celebrate diversity,.

  • Oil Tanker Attacks Lift Energy Stocks as Market Ends Two-Day Slide

    Two tankers were attacked in the.

  • Tesla’s June Rebound Hits a Speed Bump

    Plus, technology stocks fall on trade.

  • More Than 150,000 U.S. Small-Business Websites Could Be Infected With Malware at Any Given Moment. Here’s How to Protect Yours.

    Small-business victims were involved in 43.

  • How These Influencers Launched an Event to Combat Procrastination

    The creators of a Bali retreat.

  • Tesla Stock Continues June Rebound as Shares Rise Again

    The broader stock market was flat..

  • What You Need to Know About Instagram’s New Creator Account

    Tnis new option may look good.

  • 3 Reasons Most Businesses Don’t Reach 6 Figures

    June 10, 2019 3 min read.

  • Stocks Bounce Back After President Trump Calls Off Mexican Tariffs

    Plus, Analog Devices jumps on a.

  • ‘One Email From Whole Foods Launched My Entire Business,’ Says the Co-Founder of a Gluten Free Frozen Food Brand

    Former restaurateur Vanessa Phillips pursued her.

  • Celebrity Jeweler Alex Todd Gets Saucey

    His clients include Jay Z and.

  • Get Salesforce Certified and Raise Your Earning Potential

    This course bundle will make the.

  • Here’s What Entrepreneurs Must Know About the Booming VPN Industry

    The future of the VPN industry.

  • How to Become a Better Digital Marketer in 2019

    Master SEO, social media marketing, copywriting.

  • The Best Employees Have These ’31 Flavors’

    When hiring or managing employees, it.