What Happened?
Shares of automotive manufacturer Ford (NYSE: F) fell 5.8% in the afternoon session after Goldman Sachs downgraded the stock, citing growing concerns over trade tariffs on imported vehicles and car parts, which are expected to pressure profit margins and disrupt supply chains across the industry. The firm added, "We downgrade Ford to Neutral from Buy to better reflect a more difficult cyclical dynamic including competition internationally, weaker consumer demand, and what we expect will be higher costs from tariffs.".
The shares closed the day at $9.12, down 3.8% from previous close.
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What The Market Is Telling Us
Ford’s shares are somewhat volatile and have had 10 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 2 days ago when the stock dropped 6% on the news that markets gave up early gains with optimism over progress in US-China trade talks quickly fading as the Trump administration announced plans to raise tariffs on all Chinese imports to well above 100%. Hopes had been lifted by chatter of constructive negotiations aimed at easing and eventually removing U.S. trade tariffs. But the news confirmed fears of a prolonged trade fight, increasing uncertainty about the direction of economic policy. This left investors grappling with the dual threat of slower growth and higher inflation, both of which could linger if the standoff continues.
Ford is down 5.4% since the beginning of the year, and at $9.13 per share, it is trading 37.3% below its 52-week high of $14.55 from July 2024. Investors who bought $1,000 worth of Ford’s shares 5 years ago would now be looking at an investment worth $1,769.
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