What Happened?
A number of stocks fell in the afternoon session after stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for all countries. This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains.
Also, President Trump indicated he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Automation Software company Pegasystems (NASDAQ: PEGA) fell 5.6%. Is now the time to buy Pegasystems? Access our full analysis report here, it’s free.
- Travel and Vacation Providers company Hilton (NYSE: HLT) fell 5.9%. Is now the time to buy Hilton? Access our full analysis report here, it’s free.
- General Industrial Machinery company GE Aerospace (NYSE: GE) fell 5.5%. Is now the time to buy GE Aerospace? Access our full analysis report here, it’s free.
- Consumer Subscription company Match Group (NASDAQ: MTCH) fell 5.3%. Is now the time to buy Match Group? Access our full analysis report here, it’s free.
- Social Networking company Yelp (NYSE: YELP) fell 5.5%. Is now the time to buy Yelp? Access our full analysis report here, it’s free.
Zooming In On Hilton (HLT)
Hilton’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 6.4% on the news that the company reported decent first quarter results that beat analysts' revenue and EPS expectations. Additionally, adjusted EBITDA guidance for the full year 2024 was raised and came in above expectations.
On the other hand, its operating margin missed and its full-year earnings guidance fell short of Wall Street's estimates. While not perfect, this was still a solid quarter for Hilton.
Hilton is down 15.1% since the beginning of the year, and at $208 per share, it is trading 23.9% below its 52-week high of $273.45 from February 2025. Investors who bought $1,000 worth of Hilton’s shares 5 years ago would now be looking at an investment worth $3,121.
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