Domino's Pizza (DPZ) stock plummeted 5.04% in intraday trading, as investors reacted to concerns about the impact of newly announced tariffs on the restaurant industry. The sharp decline reflects growing worries about consumer spending and potential negative sentiment towards U.S.-based food chains in international markets.

According to Stifel analysts, the recently announced tariffs pose a significant risk to the restaurant industry, primarily through their potential impact on consumer demand. Higher costs for U.S. companies reliant on imports may lead to price increases or layoffs, affecting consumer spending even before any direct corporate action. This situation is expected to result in Americans cooking at home more frequently and having less disposable income for dining out.

Domino's Pizza, with its substantial international presence, is particularly vulnerable to these market forces. The company not only faces the prospect of reduced domestic consumer spending but also the risk of negative sentiment in overseas markets. Analyst Chris O'Cull noted that sales for U.S.-based restaurant chains "will likely soften due to anti-American sentiment, which could impact the recent improvement in international trends." While Domino's may not see significant increases in food costs, as many agricultural imports are currently exempt from tariffs, the overall economic impact and shift in consumer behavior could substantially affect its bottom line.