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:
- Video Conferencing company 8x8 (NASDAQ: EGHT) fell 4.4%. Is now the time to buy 8x8? Access our full analysis report here, it’s free for active Edge members.
- Data Infrastructure company Confluent (NASDAQ: CFLT) fell 4%. Is now the time to buy Confluent? Access our full analysis report here, it’s free for active Edge members.
- Listing Management Software company Semrush (NYSE: SEMR) fell 3.6%. Is now the time to buy Semrush? Access our full analysis report here, it’s free for active Edge members.
- Data Analytics company Amplitude (NASDAQ: AMPL) fell 4.1%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free for active Edge members.
- Hospitality & Restaurant Software company Toast (NYSE: TOST) fell 4.5%. Is now the time to buy Toast? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Toast (TOST)
Toast’s shares are quite volatile and have had 17 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 30 days ago when the stock dropped 3.6% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
Toast is down 2.6% since the beginning of the year, and at $35.43 per share, it is trading 28.1% below its 52-week high of $49.30 from August 2025. Investors who bought $1,000 worth of Toast’s shares at the IPO in September 2021 would now be looking at an investment worth $566.79.
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