What Happened?

A number of stocks jumped in the afternoon session after the Supreme Court struck down sweeping Trump tariffs, bringing potential relief to companies impacted by international trade disputes. 

The ruling was seen as a significant win for sectors reliant on global supply chains, as tariffs, which are essentially taxes on imported goods, have increased operating costs and squeezed profit margins for many U.S. companies. The removal of these levies is expected to lower expenses for manufacturers and retailers, potentially leading to more competitive pricing and stronger earnings. This positive development appeared to outweigh earlier concerns in the session regarding reports of slowing economic growth and rising inflation, with the broader market, including the S&P 500, ticking higher on the news. In response to the ruling, the Trump administration announced plans to impose a new 10% global tariff.

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:

• Consumer Discretionary - Footwear company Caleres (NYSE: CAL) jumped 4.9%. Is now the time to buy Caleres? Access our full analysis report here, it’s free.
• Consumer Discretionary - Apparel and Accessories company PVH (NYSE: PVH) jumped 3.2%. Is now the time to buy PVH? Access our full analysis report here, it’s free.
• Consumer Discretionary - Apparel and Accessories company Under Armour (NYSE: UAA) jumped 5.2%. Is now the time to buy Under Armour? Access our full analysis report here, it’s free.
• Consumer Discretionary - Apparel and Accessories company Carter's (NYSE: CRI) jumped 4.8%. Is now the time to buy Carter's? Access our full analysis report here, it’s free.
• Consumer Discretionary - Apparel and Accessories company Kontoor Brands (NYSE: KTB) jumped 3.1%. Is now the time to buy Kontoor Brands? Access our full analysis report here, it’s free.

Zooming In On Under Armour (UAA)

Under Armour’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 7.4% on the news that Citi downgraded the stock to Sell from Neutral, citing concerns that the company's turnaround in North America faced increasing pressure. 

The analyst pointed to several challenges, including a highly competitive environment, weak direct-to-consumer traffic, and the need for heavier marketing investment. This downgrade came shortly after Under Armour had lifted its full-year outlook following stronger-than-expected third-quarter results, which had previously sent the shares higher. The new rating suggested that risks were skewed to the downside, reversing the recent positive sentiment.

Under Armour is up 53.6% since the beginning of the year, and at $8.13 per share, has set a new 52-week high. Investors who bought $1,000 worth of Under Armour’s shares 5 years ago would now be looking at an investment worth $366.65.

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