What Happened?
A number of stocks fell in the afternoon session after President Donald Trump threatened to impose 'massive' tariffs on Chinese products, reigniting trade war fears.
In a social media post, Trump stated the move was a potential countermeasure to China 'becoming very hostile,' following Beijing's announcement of new export controls on rare-earth minerals. These minerals are critical components for magnets used across the automotive, electronics, and defense industries. The unexpected development jolted Wall Street, which had been trending higher. The news sent all major indices into negative territory, with the tech-rich Nasdaq Composite falling 1.7%, the S&P 500 dropping 1.3%, and the Dow Jones Industrial Average declining by 0.9%.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Data Analytics company Samsara (NYSE: IOT) fell 4.7%. Is now the time to buy Samsara? Access our full analysis report here, it’s free for active Edge members.
- Advertising Software company Zeta Global (NYSE: ZETA) fell 5.2%. Is now the time to buy Zeta Global? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Zeta Global (ZETA)
Zeta Global’s shares are extremely volatile and have had 51 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3.3% on the news that tech stocks pulled back as a report raised concerns about artificial intelligence demand and profitability. Oracle shares lost more than 5% following news of its cloud business generating lighter margins than expected. According to internal documents cited in the report, the gross profit margin for this business was only 14%, a figure much lower than what analysts had expected. This suggested that the high costs of running the advanced chip infrastructure were weighing on profitability. Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. These updates drove investors away from riskier assets and towards safe havens, a trend highlighted by gold futures hitting a record $4,000 per ounce for the first time.
Zeta Global is up 2.5% since the beginning of the year, but at $19.20 per share, it is still trading 47.7% below its 52-week high of $36.74 from November 2024. Investors who bought $1,000 worth of Zeta Global’s shares at the IPO in June 2021 would now be looking at an investment worth $2,160.
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