What Happened?

Shares of exercise equipment company Peloton (NASDAQ:PTON) fell 7.5% in the afternoon session as markets tumbled despite holding steady the previous day, while concerns over the ongoing trade war continued to spread. 

Investors briefly felt some optimism after the Trump administration said it would hold off on tariffs for automakers that met USMCA (United States-Mexico-Canada Agreement) rules. That helped the auto sector in particular, and there was perhaps some hope that the door was open to more broadly delaying tariffs. The sentiment seemed to be shifting in the other direction today, and the market is in 'risk-off' mode, with sectors such as tech seeing outsized declines. As of this writing, the S&P 500 had fallen 7% from where it closed on February 19th and the Nasdaq Composite dropped 10% over the same period.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Peloton? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Peloton’s shares are extremely volatile and have had 61 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 3 days ago when the stock dropped 5.8% as the major indices tumbled after the Trump administration confirmed that the planned 25% tariffs on imports from Canada and Mexico, two of the largest trading partners of the United States, would proceed as planned. The news added to the market's growing unease, which had been building since the start of 2025. For Wall Street analysts, investors, and businesses, the announcement underscored the urgent need to plan ahead and factor the potential downside of the tariffs into their financial forecasts. Key concerns included rising production costs, which are often passed on to consumers, and the risk of inflation, further heightening economic uncertainty.

Peloton is down 28.4% since the beginning of the year, and at $6.33 per share, it is trading 40.2% below its 52-week high of $10.57 from December 2024. Investors who bought $1,000 worth of Peloton’s shares 5 years ago would now be looking at an investment worth $253.00.

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