What Happened?
Shares of online community and discussion platform Reddit (NYSE:RDDT) fell 4.7% in the afternoon session after President Trump threatened to impose "massive" new tariffs on Chinese imports, reigniting trade war fears.
The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-rich Nasdaq Composite fell 1.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies. The sell-off marked a significant reversal from the morning's slight gains, highlighting the market's sensitivity to geopolitical trade developments.
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 Reddit? Access our full analysis report here.
What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 64 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 7 days ago when the stock gained 4.4% on the news that a wave of bullish analyst ratings reaffirmed confidence in the company's advertising monetization potential. Investment firm Citizens maintained its "Market Outperform" rating and a $300 price target. The firm's analysis suggested there was "ample room to drive revenue outperformance" as Reddit's advertising tools mature, expecting earnings to "materially outperform." Adding to the positive sentiment, Piper Sandler also reiterated its "Overweight" rating on the stock. This optimism reflected a broader trend among analysts, which helped the stock recover from a recent drop.
Reddit is up 22.6% since the beginning of the year, but at $203.36 per share, it is still trading 24.9% below its 52-week high of $270.71 from September 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $4,032.
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