What Happened?

A number of stocks jumped in the afternoon session after markets rallied sharply on news that President Trump announced a 90-day tariff pause. Reciprocal tariffs were also dropped to 10% for most countries, sparking renewed optimism amid ongoing trade talks. The major stock indices rose as investors, growing impatient of seemingly irrational tariff actions, welcomed the pause as a sign of a more measured path forward. 

However, Trump was quick to note that China was not part of the pause. Instead, he prepared to raise tariffs on Chinese goods to 125% after China announced retaliatory tariffs on US imports. This tough stance on China stood in sharp contrast to the softer tone toward others. In a week marked by growing uncertainty, this news eased some of the pressure. The questions remain whether we are out of the woods and can sustain the rally or not.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, following stocks were impacted:

• Automobile Manufacturing company Lucid (NASDAQ:LCID) jumped 11.4%. Is now the time to buy Lucid? Access our full analysis report here, it’s free.
• Travel and Vacation Providers company American Airlines (NASDAQ:AAL) jumped 18.9%. Is now the time to buy American Airlines? Access our full analysis report here, it’s free.
• Travel and Vacation Providers company Delta Air Lines (NYSE:DAL) jumped 23.4%. Is now the time to buy Delta Air Lines? Access our full analysis report here, it’s free.
• Automobile Manufacturing company Ford (NYSE:F) jumped 8.2%. Is now the time to buy Ford? Access our full analysis report here, it’s free.
• Automobile Manufacturing company Rivian (NASDAQ:RIVN) jumped 10.9%. Is now the time to buy Rivian? Access our full analysis report here, it’s free.

Zooming In On Delta Air Lines (DAL)

Delta Air Lines’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Delta Air Lines and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 30 days ago when the stock dropped 14.3% on the news that the company reported underwhelming preliminary guidance for the March 2025 (Q1 2025) quarter as it lowered its sales, operating margins, and earnings estimates. The revised outlook called for sales growth of 3%-4% (vs previous expectations of 7%-9%) and an operating margin of 4%-5% (vs. previous expectations of 6%-8%). Similarly, EPS was revised to $0.3-$0.5 (vs earlier expectations of $0.7 - $1.0) Management pointed the finger at shaky consumer and corporate confidence, saying macro uncertainty is putting a damper on domestic demand. But they also tried to keep things positive, noting that premium, international, and loyalty revenue were holding up just fine, showing the strength of their diversified revenue streams.

Delta Air Lines is down 24.5% since the beginning of the year, and at $44.59 per share, it is trading 35.4% below its 52-week high of $69.06 from February 2025. Investors who bought $1,000 worth of Delta Air Lines’s shares 5 years ago would now be looking at an investment worth $1,828.

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