10 Stocks Bear the Brunt of Trade Threats

Wall Street’s main indices fell further on Tuesday as investors sold off positions to mitigate risks from the ongoing trade tensions among some of the world’s largest economies.

The Dow Jones fell the most during the trading session, losing 1.55 percent, while the S&P 500 declined 1.22 percent. The Nasdaq dropped by 0.35 percent.

Following the US imposition of a 25-percent tax on goods from Canada and Mexico on Tuesday, countries announced a promise to retaliate. Canada, as well as China, which received a 10 percent additional tax, immediately announced retaliation. Mexico is expected to follow suit.

The negative sentiment spilled over to 10 stocks, predominantly retailers, with the tariff threats seen to pose pressures on their profit margins. In this article, we have detailed the reasons behind their declines.

To come up with Tuesday’s worst performers, we considered only the stocks with $2 billion in market capitalization and $5 million in daily trading volume.

A man in long sleeves looking at stock market data. Photo by Tima Miroshnichenko on Pexels

10. Bank of America Corporation (NYSE:BAC)

Bank of America dropped its share prices by 6.34 percent on Tuesday—a second straight day—as investor sentiment was weighed down by its potential risks from the growing trade tensions between the US and its largest trading partners.

BAC traded in line with its counterparts on Tuesday, albeit it posted the largest losses among its peers.

With the economies throwing tariff retaliations, investors moved to park funds for now to mitigate risks. With BAC set to release its next earnings results in April next month, investors will be looking out for any cues on its provisions for credit losses (PCL), which could go higher with higher taxes now in place.

PCLs are funds that money lenders keep and are treated as their own expense to absorb delinquent debts that can no longer be recovered.

9. Delta Air Lines Inc. (NYSE:DAL)

Delta Air Lines dropped its share prices by 6.43 percent on Tuesday to close at $54.69 apiece, as investors parked funds to mitigate risks from the ongoing trade war’s impact on its business.

DAL’s decline was in line with its peers, with United Airlines losing 5.96 percent, Southwest Airlines decreasing 3.79 percent, American Airlines shedding 3.75 percent, and Alaska Air Group diving 6.58 percent, among others.

With President Donald Trump’s imposition of a 10 percent tariff on energy resources from Canada, the transportation and aviation sectors are among the industries expected to be heavily hit by higher fuel prices that would impact their profit margins.

In other news, DAL announced that it would reduce the frequency of roundtrip flights to Pocatello Regional Airport in Idaho to just one, citing low passenger numbers as the reason.