Investors' Appetite for Risk Wanes Amid Economic Uncertainty

Trump's tariffs, recession fears hit Starbucks, Chipotle, McDonald's stocks

By Patti Domm, CNBC • Published April 7, 2025

Tariffs and recession fears weighed on the stocks of Starbucks, Chipotle Mexican Grill and McDonald's on Monday, as investors grew increasingly concerned about the impact of the Trump administration's trade policies on the global economy.

The Dow Jones Industrial Average fell more than 200 points, while the S&P 500 and Nasdaq Composite also declined, as investors digested the latest developments in the trade war between the U.S. and China.

Starbucks' shares fell 2.5% to $63.40, Chipotle's dropped 3.1% to $424.50, and McDonald's shares slid 2.2% to $170.50.

The tariffs, which were announced last week, are expected to hit a wide range of consumer goods, including coffee, food and beverages. The move is seen as a major escalation in the trade war between the U.S. and China, and has sparked concerns about the potential impact on the global economy.

"We're seeing a lot of uncertainty in the market right now, and it's not just the tariffs," said Michael Antonelli, market strategist at Robert W. Baird. "It's the overall trade situation, and the risk of a recession. All of this is contributing to a lot of volatility in the market."

The tariffs are expected to take effect in the coming weeks, and could have a significant impact on the companies that rely on China for a significant portion of their supply chain. Starbucks, for example, sources a significant portion of its coffee beans from China, while Chipotle and McDonald's both rely on China for a portion of their beef and chicken supplies.

The companies have been vocal about their opposition to the tariffs, with Starbucks CEO Howard Schultz saying that the move would be "devastating" for the company. Chipotle and McDonald's have also expressed concerns about the potential impact of the tariffs on their businesses.

As the trade war continues to escalate, investors are growing increasingly concerned about the potential impact on the global economy. The International Monetary Fund has warned that the trade war could lead to a recession, and many economists are also sounding the alarm.

The market is likely to remain volatile in the coming days and weeks, as investors wait to see how the trade situation plays out. In the meantime, investors are likely to continue to seek out safe-haven assets, such as bonds and gold, as a way to protect their portfolios from the uncertainty.