What Happened?
Shares of aerospace and defense company Boeing (NYSE: BA) fell 10.1% in the morning 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%.
Already facing increased competition from domestic aircraft manufacturers, Boeing risked becoming even less competitive. Also, China has historically been a significant source of demand for Boeing's commercial aircraft, and the new tariffs could delay or derail future orders. For investors, this development raised concerns about Boeing's ability to regain momentum in a market essential to its growth.
The shares closed the day at $136.59, down 9.5% from previous close.
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What The Market Is Telling Us
Boeing’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 Boeing and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 24 hours ago when the stock dropped 9.5% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures. Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.
Boeing is down 20.3% since the beginning of the year, and at $137 per share, it is trading 28.4% below its 52-week high of $191.42 from June 2024. Investors who bought $1,000 worth of Boeing’s shares 5 years ago would now be looking at an investment worth $920.88.
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