What Happened?
A number of stocks fell in the afternoon session after China imposed a 34% tariff on all U.S. imports amid escalating trade war tensions. This was partly in response to the "reciprocal tariffs" announced by the Trump administration the previous day, with levies on Chinese goods estimated to be as high as 50%. The move is the first in a list of anticipated retaliatory measures that could have had investors really worried. The tariffs were also widely seen as a significant threat to global trade flows, with the potential to slow economic growth and drive up consumer prices.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Online Marketplace company Sea (NYSE: SE) fell 11.4%. Is now the time to buy Sea? Access our full analysis report here, it’s free.
- Automation Software company Microsoft (NASDAQ: MSFT) fell 4.9%. Is now the time to buy Microsoft? Access our full analysis report here, it’s free.
- Specialized Technology company PAR Technology (NYSE: PAR) fell 7.7%. Is now the time to buy PAR Technology? Access our full analysis report here, it’s free.
Zooming In On Sea (SE)
Sea’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Sea and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 16.2% on the news that the company reported strong third-quarter 2024 earnings that blew past analysts' revenue and EBITDA expectations. The EBITDA beat was partly due to its lower sales and marketing expenses compared to the previous year. This sent shares higher because a key debate surrounding Sea was whether the company could hop off the treadmill of marketing spend, which used to exceed its revenue in previous years. Overall, this quarter had some key positives.
Sea is up 2.1% since the beginning of the year, but at $107.06 per share, it is still trading 26.8% below its 52-week high of $146.31 from March 2025. Investors who bought $1,000 worth of Sea’s shares 5 years ago would now be looking at an investment worth $2,390.
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