What Happened?

Shares of online used car dealer Carvana (NYSE: CVNA) fell 19.8% in the morning session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. 

Markets reacted negatively to the announcement, reflecting deep concerns among investors about the broader economic implications. The tariffs were likely seen as a significant threat to global trade flows, with the potential to slow economic growth, drive up consumer prices, and spark retaliatory measures. 

Wedbush analyst Dan Ives captured the prevailing market anxiety, stating, "We would characterize this slate of tariffs as 'worse than the worst case scenario' the Street was fearing." His comment highlighted how the scope and severity of the tariffs far exceeded Wall Street's expectations, adding a new layer of uncertainty for businesses and investors.

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 Carvana? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Carvana’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. But moves this big are rare even for Carvana and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 6.3% on the news that Morgan Stanley analysts upgraded the stock's rating from Neutral to Buy. The analysts noted that the stock's recent pullback represented a "unique opportunity to build a position."

Carvana is down 7% since the beginning of the year, and at $185.58 per share, it is trading 35% below its 52-week high of $285.33 from February 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $4,042.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. We prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.