What Happened?
A number of stocks fell in the afternoon session after trade negotiations between the United States and Canada broke down, sparking concerns over new 50% tariffs and retaliatory trade measures.
Bilateral trade negotiations between Washington and Ottawa collapsed unexpectedly, triggering the implementation of 50% tariffs on approximately $20 billion worth of Canadian imports, including electrical equipment and building materials. In addition, the White House signaled plans to impose 50% tariffs on Canadian vehicles, auto parts, and steel by 2027. Canadian Prime Minister Mark Carney vowed to retaliate dollar for dollar to defend domestic industries.
The sudden escalation in trade tensions has raised significant headwinds for the industrial and manufacturing sectors, which depend on deeply integrated cross-border supply chains. Analysts warn that widespread import duties and reciprocal trade barriers threaten to increase production input costs, disrupt operational logistics, and dampen demand for heavy machinery and industrial components. Consequently, investors pulled back from trade-sensitive equities as broad market leadership cooled.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Electronic Components company nLIGHT (NASDAQ: LASR) fell 7.4%. Is now the time to buy nLIGHT? Access our full analysis report here, it’s free.
- HVAC and Water Systems company AAON (NASDAQ: AAON) fell 3.4%. Is now the time to buy AAON? Access our full analysis report here, it’s free.
- Defense Contractors company AeroVironment (NASDAQ: AVAV) fell 6.5%. Is now the time to buy AeroVironment? Access our full analysis report here, it’s free.
- Defense Contractors company Kratos (NASDAQ: KTOS) fell 6.5%. Is now the time to buy Kratos? Access our full analysis report here, it’s free.
- Renewable Energy company ChargePoint (NYSE: CHPT) fell 4.9%. Is now the time to buy ChargePoint? Access our full analysis report here, it’s free.
Zooming In On nLIGHT (LASR)
nLIGHT’s shares are extremely volatile and have had 73 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 biggest move we wrote about over the last year was 6 months ago when the stock gained 18.5% on the news that it announced plans to showcase its high-energy laser weapon solutions at an upcoming conference, highlighting its focus on the defense market. The company stated it would feature its newly developed 70kW-class Laser Weapon System and discuss its 30kW and 10kW High-Energy Lasers. This news appeared to reinforce investor confidence in the company's strategic direction. The announcement followed nLIGHT's recent decision to exit its cutting and welding business to reallocate resources to higher-growth and higher-priority areas within the defense sector. That move, while expected to create a near-term sales hit, was seen as strategically sound for the long term by some analysts. For instance, Craig-Hallum recently raised its price target on the stock, noting the exit would increase aerospace and defense revenue to over 80% of the company's total mix.
nLIGHT is up 15.9% since the beginning of the year, but at $44.49 per share, it is still trading 47.6% below its 52-week high of $84.95 from May 2026. Investors who bought $1,000 worth of nLIGHT’s shares 5 years ago would now be looking at an investment worth $1,638.
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