Tariffs Trigger Sharp Decline in U.S. Retail Stocks, Coca Cola and Others Become Industry Safe Haven Choices
After the Trump administration announced new tariffs, U.S. stock index futures fell, and retail giants faced selling pressure. Consumer goods stocks such as Coca Cola and Procter & Gamble became investors' safe-haven choices, with only slight declines in their stock prices. In contrast, the stock prices of retailers like Walmart and Amazon dropped significantly, with the SPDR S&P Retail ETF falling by 5.5%. Economists warned that tariffs could increase the risks of inflation and economic recession
According to the Zhitong Finance APP, U.S. stock index futures fell after the Trump administration announced new tariffs. Among them, retail giants faced selling pressure in pre-market trading on Thursday. Procter & Gamble (PG.US), Coca Cola (KO.US), PepsiCo (PEP.US), Mondelez International (MDLZ.US), and Philip Morris International (PM.US) appear to be the four main consumer goods stocks that investors are avoiding due to tariff impacts.
President Trump stated that the tariffs imposed by the U.S. will be "about half" of the tariffs that these countries impose on U.S. goods, as calculated by the White House. Trump believes that the tariffs will increase competition and lower prices, although many economists warn that the risks of inflation and economic recession have now increased.
David French, Executive Vice President of Government Relations at the National Retail Federation, stated that more tariffs mean more anxiety and uncertainty for U.S. businesses and consumers. The tariffs will be passed on to end consumers, and foreign suppliers will not pay the tariffs.
As of the time of writing, with the market down more than 3%, the stock prices of Coca Cola, PepsiCo, Mondelez International, and Philip Morris International have only slightly declined, while Procter & Gamble's stock price has slightly increased.
In contrast, other retailers' stock prices have fallen sharply. Walmart (WMT.US), Amazon (AMZN.US), Dick's Sporting Goods (DKS.US), and Best Buy (BBY.US) fell nearly 6.0% in pre-market trading, Costco (COST.US) dropped 3.5%, and Target (TGT.US) fell 5.1%. Home improvement giants Home Depot (HD.US) and Lowe's (LOW.US) both fell about 4%. Other department store stocks also did not escape, with Macy's (M.US) down 4.6% and Kohl's (KSS.US) down 4.9%. The SPDR S&P Retail ETF (XRT.US) fell 5.5%