What Happened?
A number of stocks fell in the afternoon session after the Trump administration announced a new 25% tariff on imported trucks.
President Trump announced via his Truth Social platform that a 25% tariff will be levied on all medium and heavy-duty trucks imported into the United States, effective November 1st, 2025. This move is poised to have a significant impact on truck manufacturers, particularly those based in neighboring countries that export to the U.S. The new tariff could increase costs for foreign manufacturers, potentially altering the competitive landscape within the heavy-vehicle industry. Investors are now watching to see how this will affect supply chains, pricing, and the stock performance of both domestic and international truck makers.
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:
- Ground Transportation company Werner (NASDAQ: WERN) fell 3.7%. Is now the time to buy Werner? Access our full analysis report here, it’s free for active Edge members.
- Air Freight and Logistics company GXO Logistics (NYSE: GXO) fell 3.1%. Is now the time to buy GXO Logistics? Access our full analysis report here, it’s free for active Edge members.
- Ground Transportation company Heartland Express (NASDAQ: HTLD) fell 3.5%. Is now the time to buy Heartland Express? Access our full analysis report here, it’s free for active Edge members.
- Ground Transportation company RXO (NYSE: RXO) fell 4.2%. Is now the time to buy RXO? Access our full analysis report here, it’s free for active Edge members.
- Ground Transportation company Schneider (NYSE: SNDR) fell 2.3%. Is now the time to buy Schneider? Access our full analysis report here, it’s free for active Edge members.
Zooming In On RXO (RXO)
RXO’s shares are extremely volatile and have had 30 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 4 days ago when the stock gained 5% on the news that a UBS analyst raised the company's price target to $17 from $15. The analyst, Thomas Wadewitz, kept a "Neutral" rating on the stock despite the price target increase. This adjustment represented a 13.33% rise in the analyst's valuation. The move came as broader European stock markets also recorded strong gains. The general sentiment among analysts for RXO remained cautious, with a consensus "Hold" rating based on the views of multiple financial experts.
RXO is down 28.5% since the beginning of the year, and at $16.92 per share, it is trading 47% below its 52-week high of $31.90 from November 2024. Investors who bought $1,000 worth of RXO’s shares at the IPO in October 2022 would now be looking at an investment worth $805.71.
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