What Happened?
A number of stocks fell in the afternoon session after investors reacted to escalating trade tensions between the US and China following President Trump's announcement of a potential 'massive increase' in tariffs on Chinese imports.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents.
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:
- Regional Banks company KeyCorp (NYSE: KEY) fell 3.5%. Is now the time to buy KeyCorp? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Fulton Financial (NASDAQ: FULT) fell 3.2%. Is now the time to buy Fulton Financial? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company First Financial Bankshares (NASDAQ: FFIN) fell 3.2%. Is now the time to buy First Financial Bankshares? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company East West Bank (NASDAQ: EWBC) fell 3.2%. Is now the time to buy East West Bank? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Coastal Financial (NASDAQ: CCB) fell 3.6%. Is now the time to buy Coastal Financial? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Coastal Financial (CCB)
Coastal Financial’s shares are quite volatile and have had 19 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 10 days ago when the stock dropped 5.1% on the news that reports revealed a drop in consumer confidence amid mounting fears of a potential U.S. government shutdown.
The Conference Board's Consumer Confidence Index fell to 94.2 in September, a larger-than-expected decline fueled by pessimism over inflation and the job market. This drop suggests consumers may cut back on borrowing and spending, directly impacting banks' profitability.
Adding to the concerns, Federal Reserve Vice Chair Philip N. Jefferson highlighted a cooling economy, with GDP growth slowing to 1.5% in the first half of 2025 due to weaker consumer spending. Compounding these issues is the looming threat of a U.S. government shutdown, as a deal on a spending plan remains elusive. A shutdown could further squeeze the economy and delay crucial economic data, increasing market uncertainty and prompting a cautious approach from investors.
Coastal Financial is up 23.7% since the beginning of the year, but at $104.82 per share, it is still trading 11.2% below its 52-week high of $118 from September 2025. Investors who bought $1,000 worth of Coastal Financial’s shares 5 years ago would now be looking at an investment worth $7,492.
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