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Key Takeaways
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The S&P 500 slipped 0.8% on Tuesday, March 11, as investors digested the latest shifts in trade policy.
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Teradyne shares tumbled after the manufacturer of electronics testing equipment indicated that tariffs and trade restrictions could restrain growth.
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Shares of Southwest Airlines soared after the carrier said it would begin offering a basic economy option with charges for checked baggage.
Major U.S. equities indexes fell Tuesday, extending the downtrend for stocks.
President Donald Trump announced that he would lift tariffs to 50% on steel and aluminum imports from Canada and reportedly began negotiations that could walk back the threat later in the day.
The S&P 500 fell 0.8%, while the Dow industrials ended with a daily loss of 1.1%. After fluctuating for much of the session, the tech-heavy Nasdaq closed 0.2% lower.
Teradyne (TER) shares suffered the steepest decline of any S&P 500 stock on Tuesday, plunging 17.1% after the manufacturer of electronics testing equipment updated its guidance to reflect the potential impact of U.S. trade policies. In a presentation to investors, Teradyne said it expects near-term volatility in its semiconductor testing business and highlighted additional uncertainties related to tariffs and trade restrictions.
Delta Air Lines (DAL) reduced its sales and profit forecasts for the first quarter, noting that economic uncertainty is weighing on travel demand. Delta's CEO pointed to a slowdown in corporate and consumer spending, with businesses and consumers reining in spending in response to the hazy macroeconomic outlook. Delta shares descended 7.2% on Tuesday.
Other stocks in the travel industry came under pressure following Delta's warning about demand trends. Shares of online booking platform Expedia Group (EXPE) sank 7.3%, while shares of numerous hotel and cruise operators also moved lower.
One stock that bucked the negative trend in the travel sector on Tuesday was Southwest Airlines (LUV), whose shares soared 8.3% after the carrier said it would launch a basic economy ticket option with charges for checked bags, later this year. The change to Southwest's trademark perks is aimed at boosting revenue following disputes with activist investor Elliott Investment Management.
Telecom giant Verizon Communications (VZ) indicated that increased competition and high prices could weigh on subscriber growth. It also noted that customers are waiting longer to upgrade their devices than they had in previous years. Verizon shares dropped 6.7%.
Shares of server manufacturer Super Micro Computer (SMCI) popped 10.7% higher, notching the S&P 500's strongest performance, after Rosenblatt Securities reinitiated coverage of the stock with a "buy" rating. Analysts noted an appreciation among investors for Supermicro's capabilities in terms of innovative design and manufacturing scale. Rosenblatt's team also highlighted unique elements of Supermicro's architecture that are key in optimizing artificial intelligence (AI) performance.