Finance·Starbucks’ stock is being pummelled by Trump’s coffee tariffs while the rest of the market soarsBy Jim EdwardsBy Jim EdwardsExecutive Editor, Global NewsJim EdwardsExecutive Editor, Global NewsJim Edwards is the executive editor for global news at Fortune.
He was previously the editor-in-chief of Insider's news division and the founding editor of Insider UK. His investigative journalism has changed the law in two U.S. federal districts and two states.
The U.S. Supreme Court cited his work on the death penalty in the concurrence to Baze v. Rees, the ruling on whether lethal injection is cruel or unusual.
He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.SEE FULL BIO Photo by: Jeffrey Greenberg/Universal Images Group via Getty ImagesS&P 500 futures are ticking upward this morning but Starbucks’ stock is underperforming the market due in part to an incoming 50% U.S.
tariff on Brazilian coffee. Analysts estimate a 3.5% annual cost increase for the company, reducing earnings. While U.S.
coffee prices rise, the impact on Brazil is small, and global coffee prices are falling, benefiting other . S&P 500 futures are up 0.23% this morning, after the index closed down 0.49% yesterday.
The blue-chip ranking has gained 7% year to date and remains near its all-time high, but there is one major name that isn’t benefiting from the risk-on attitude on Wall Street right now: Starbucks.
SBUX is down 1.15% YTD, and is down 8% over the last five trading sessions. It is not difficult to figure out why. President Trump is sitting on the stock.
Or rather, his 50% tariff on Brazil—the world’s largest ducer of coffee—isn’t investors’ preferred cup of tea.
In its Q2 earnings call, the company reported a 2% decline in same-store sales, even as per-customer sales rose 1%. That suggests coffee price increases are already percolating through the company.
Starbucks’ costs could rise 3.5% annually, according to TD Cowen analyst Andrew Charles. That would wipe 2 cents a off Starbucks’ earnings, Charles said.
The U.S., of course, grows close to zero coffee. Thus the tariff on Brazil will result solely in price increases for American coffee drinkers. Counterintuitively, it won’t hurt Brazil that much.
Goldman Sachs jects that the Brazilian economy will still grow by 2.3% this year. The rest of the world is ly to benefit. There are plenty of for coffee. If U.S.
demand goes down, the extra supply for foreign customers is ly to depress price growth. That’s already happening.
Global arabica coffee futures have declined by 30% this year and currently sit at around $2.96 per tonne.
In sum, coffee in America is getting more expensive, but for everyone else it’s getting cheaper.
Chart from Trading Economics That dynamic—that the tariffs are going to hurt global economies less than first thought and may contain advantages for some foreign —goes some way to explaining why are largely up across Asia and Europe this morning.
Here’s a snapshot of the action prior to the opening bell in New York: S&P 500 futures were up 0.2% this morning, premarket, after the index closed down 0.49% yesterday.
STOXX Europe 600 was flat in early trading. The U.K.’s FTSE 100 was up 0.18% in early trading. Japan’s Nikkei 225 was up 0.6%. China’s CSI 300 was up 0.24%. The South Korea KOSPI was flat.
India’s Nifty 50 was down 0.23%. Bitcoin sank to $113.9K.Introducing the 2025 Fortune 500, the definitive ranking of the biggest companies in America. Explore this year's list.