For the second day in a row, stock markets have been reacting to the Trump administration’s widespread tariff announcement.
On April 2, Trump announced a 10% baseline tariff on all imports into the U.S. as well as rates that reach as high as 46% for Vietnam, 34% for China and 20% for the countries making up the European Union.
The following Thursday, the S&P 500 reported its worst day since the Covid pandemic in 2020 while the Dow Jones Industrial Average also dropped 4%, or 1,679 points, and the Nasdaq Composite index also fell by 6%.
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Delta, United shares continue to tumble amid tariff outlook
Airline shares were predictably not immune from such a far-reaching announcement; Delta (DAL) stock started April 4 down nearly 6% at $36.57 while United Airlines (UAL) stock dropped over 10% in a single day to $54.83.
American Airlines (AAL) shares are, at $9.08, down 32% from the same day last month.
While tariffs will have a longstanding impact on the cost of plane manufacturing, airline shares have already been on the downward trend due to recession fears and low consumer confidence leading in turn to lower spending on travel.
Related: Airline stocks are also having a terrible day
“The government contractors, the aerospace and defense business, certainly the employees that feel threatened as to whether they’re going to have a job are not out there spending money traveling,” Delta CEO Ed Bastian said during a March 11 CNBC interview.
Low-cost carriers like Southwest (LUV) and Frontier Airlines (ULCC) have also seen their shares plummet since the start of 2025 by a respective 18% and 53%.
Delta, United and American Airlines are the “big three” airlines that are all seeing their stock tumble.
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On April 1, investment firm Jefferies downgraded its Delta, American Airlines, and Southwest outlook while still maintaining its Buy rating. This further caused the carriers’ shares to plummet at the start of the month. Raymond Jones has also downgraded United shares while upgrading the ultra-low-cost Allegiant Air (ALGT) from Outperform to Strong Buy.
Analysts say airlines are in for ‘short-term pain’
“Consumer sentiment continues to disappoint, now at four-year lows, and tariffs take effect this week after delays affecting business confidence,” the investor note reads. “GDP-driven businesses like airlines are in for short-term pain.”
With the tariffs having a far-reaching global impact, international airlines like Lufthansa (DLAKF) , Air New Zealand (ANZFF) and Singapore Airlines (SINGF) have all also taken an immediate tumble following April 3. Throughout the day, shares rebounded somewhat but still remained significantly lower than they were at the start of the year.
More on travel:
United Airlines places big bet on new flights to trendy destinationGovernment issues new travel advisory on popular beach destinationAnother country just issued a new visa requirement for visitors
The combination of tariff impact on manufacturing and low traveler confidence are all coming together to create a prolonged dive that at the start of the year the same analysts were still seeing as a temporary dip. Experts also predict that, with the tariffs leading to a higher cost of living for the average U.S. family, less discretionary income will also seep into how much people travel.
“I went into this year expecting it to be a blue sky year for airlines,” TD Cowen analyst Tom Fitzgerald said in a WSJ interview at the start of April. “Now it’s just kind of clouds everywhere and it’s unclear when they’re going to dissipate.”
Related: Veteran fund manager issues dire S&P 500 warning for 2025
