What Happened?
Shares of online home goods retailer Wayfair (NYSE: W) fell 26.6% in the morning session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%.
From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Wayfair? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Wayfair’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. But moves this big are rare even for Wayfair and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 7.3% on the news that the Bureau of Economic Analysis reported that the Fed's preferred inflation gauge (the Personal Consumption Expenditures (PCE) price index) revealed core inflation came in hotter than expected, fueling fear of stagflation (an economic situation of slow growth and rising prices). Core inflation excludes food and energy prices.
The Core PCE index showed inflation rose 2.8% (vs. estimates for a 2.7% increase) in February 2025 compared to the previous year and accelerated 0.4% (vs. estimates for a 0.3% increase) over the previous month. These figures added to concerns over proposed tariffs, which rattled markets all week. The combination of rising inflation and escalating trade tensions likely clouded the economic outlook, raising uncertainty for businesses and policymakers.
Wayfair is down 47.2% since the beginning of the year, and at $24.32 per share, it is trading 66.7% below its 52-week high of $72.94 from May 2024. Investors who bought $1,000 worth of Wayfair’s shares 5 years ago would now be looking at an investment worth $480.30.
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