What Happened?

Shares of online home goods retailer Wayfair (NYSE:W) fell 5.5% in the pre-market session after anxiety and uncertainty rattled markets as the major stock indices pulled back in the morning session amid concerns about "reciprocal tariffs" to be announced later in the week. The planned tariffs, scheduled for April 2, 2025 (dubbed Liberation Day), were targeted at all countries where the United States had a trade deficit. 

Simply put, if a US trading partner imposed higher tariffs on American goods than the US did on theirs, the "reciprocal tariffs" would apply.

The prospect of heightened trade tensions seemed to have stoked fears of stagflation (slower economic growth and elevated inflation) as the anticipated tariffs will likely raise input costs for businesses.

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

What The Market Is Telling Us

Wayfair’s shares are extremely volatile and have had 51 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 7.3% on the news that the Bureau of Economic Analysis reported that the Fed's preferred inflation gauge (the Personal Consumption Expenditures (PCE) price index) revealed core inflation came in hotter than expected, fueling fear of stagflation (an economic situation of slow growth and rising prices). Core inflation excludes food and energy prices. 

The Core PCE index showed inflation rose 2.8% (vs. estimates for a 2.7% increase) in February 2025 compared to the previous year and accelerated 0.4% (vs. estimates for a 0.3% increase) over the previous month. 

These figures added to concerns over proposed tariffs, which rattled markets all week. The combination of rising inflation and escalating trade tensions likely clouded the economic outlook, raising uncertainty for businesses and policymakers.

Wayfair is down 30.8% since the beginning of the year, and at $31.84 per share, it is trading 56.4% below its 52-week high of $72.94 from May 2024. Investors who bought $1,000 worth of Wayfair’s shares 5 years ago would now be looking at an investment worth $596.18.

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