What Happened?

Shares of kitchenware and home goods retailer Williams-Sonoma (NYSE: WSM) fell 3.3% in the morning session after President Donald Trump announced a "major Tariff Investigation on Furniture coming into the United States.". The announcement, made on the Truth Social network, stated that an investigation into furniture imports would be completed within 50 days, after which tariffs would be imposed at a rate "yet to be determined." Williams-Sonoma, which relies heavily on imported goods, fell alongside other furniture retailers like RH and Wayfair. 

In contrast, companies with a larger U.S. manufacturing presence, such as Ethan Allen Interiors and La-Z-Boy, saw their shares rise on the news. The potential tariffs could increase costs for importers, with China and Vietnam being the top two sources of furniture brought into the U.S.

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 Williams-Sonoma? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Williams-Sonoma’s shares are somewhat volatile and have had 13 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 11 days ago when the stock dropped 3.1% on the news that a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. 

This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands.

Williams-Sonoma is up 6.2% since the beginning of the year, and at $199.14 per share, it is trading close to its 52-week high of $217.71 from February 2025. Investors who bought $1,000 worth of Williams-Sonoma’s shares 5 years ago would now be looking at an investment worth $4,176.

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