What Happened?
Shares of parcel and cargo delivery company FedEx (NYSE:FDX) fell 12.2% in the afternoon session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%.
From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
The shares closed the day at $215.81, down 11.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy FedEx? Access our full analysis report here, it’s free.
What The Market Is Telling Us
FedEx’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for FedEx and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 5.5% on the news that Jefferies analysts upgraded the stock's rating from Hold to Buy. Citing the reason for the upgrade, the analysts added that investors were likely ignoring "idiosyncratic cost transformation," which was another way of saying that the earnings growth potential could be better than assumed.
FedEx is down 21.3% since the beginning of the year, and at $215.86 per share, it is trading 31.1% below its 52-week high of $313.52 from July 2024. Investors who bought $1,000 worth of FedEx’s shares 5 years ago would now be looking at an investment worth $1,976.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.