What Happened?
Shares of cloud monitoring platform Datadog (NASDAQ: DDOG) fell 11.6% in the afternoon session after the White House announced plans to raise global tariffs to 15%.
The major stock indexes, including the S&P 500 and Nasdaq, also sank amid the uncertainty. The downturn came after President Trump announced the tariff increase in a post on Truth Social, stating the new rate would be effective immediately on countries that had been, in his words, "'ripping' the U.S. off for decades." The move sparked concern among trade partners, with Europe warning that such tariffs could put U.S. trade deals at risk. The market-wide slide reflected investor worries about the potential impact of these new global trade policies Additionally, investor concerns about disruption in the software industry from advancements in artificial intelligence (AI) continued to cause a sector-wide sell-off. The market started the week with a more cautious tone, reflecting this unease. The current wave of AI development was seen as having similar traits to previous tech cycles, marked by genuine innovation but also by exuberant expectations and sharp market reactions to new developments.
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What Is The Market Telling Us
Datadog’s shares are very volatile and have had 22 moves greater than 5% over the last year. But moves this big are rare even for Datadog and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 2.6% on the news that investor fears over artificial intelligence disrupting the software industry sparked a broad sell-off. The anxiety stemmed from the rapid adoption of new 'agentic AI' tools, which some investors believed could dismantle traditional Software-as-a-Service (SaaS) business models. This 'AI Panic' led to indiscriminate selling across the sector. The market move reflected growing concerns about the downside of the AI boom for established software companies.
Datadog is down 24.1% since the beginning of the year, and at $101.59 per share, it is trading 49.1% below its 52-week high of $199.72 from November 2025. Investors who bought $1,000 worth of Datadog’s shares 5 years ago would now be looking at an investment worth $1,030.
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