What Happened?
A number of stocks fell in the afternoon session after the U.S. announced potential tariffs on several European countries.
The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached.
The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty.
The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
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:
- Online Marketplace company Cars.com (NYSE: CARS) fell 2.8%. Is now the time to buy Cars.com? Access our full analysis report here, it’s free.
- Online Retail company Chewy (NYSE: CHWY) fell 3.1%. Is now the time to buy Chewy? Access our full analysis report here, it’s free.
Zooming In On Chewy (CHWY)
Chewy’s shares are somewhat volatile and have had 11 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 8 days ago when the stock gained 5.6% as the stock's positive momentum continued as hedge fund Viking Global Investors sharply increased its position in the company, signaling strong conviction in its long-term potential.
The investment firm boosted its stake in Chewy by nearly 147%, adding over 8 million shares. This move brought its total ownership to approximately 13.5 million shares, with a value of around $437 million. The significant increase in the stake suggested that Viking saw a disconnect between Chewy's current stock price and the durability of its core business model. The fund's action highlighted a particular belief in the strength of the company's subscription-heavy revenue stream as it navigated recent challenges.
Chewy is down 2.2% since the beginning of the year, and at $32.74 per share, it is trading 32.1% below its 52-week high of $48.21 from June 2025. Investors who bought $1,000 worth of Chewy’s shares 5 years ago would now be looking at an investment worth $313.62.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report, it’s free.
