Abercrombie & Fitch Shares Slide As Tariff Concerns And Recession Fears Pressure Retail Sector: What's Going On?

Shares of Abercrombie & Fitch Company ANF are trading lower Tuesday as retail and apparel stocks sold off amid growing investor anxiety over U.S. tariff hikes and the rising probability of a recession.

What To Know: The decline reflects broader weakness across the sector. Shares of Gap Inc. GAP fell 7.59% and Lululemon Athletica Inc. LULU dropped 7.66%, as markets responded to fresh economic concerns. The downturn comes alongside a warning from JP Morgan, which raised its U.S. recession risk projection to 60%, citing the newly announced tariff increases as the "largest U.S. tax hike in nearly 60 years."

According to JP Morgan analyst Maia G. Crook, the 22% tariff hike is expected to strain household budgets, cut into business spending and disrupt global supply chains, all while diminishing consumer sentiment. Crook noted that while there's still a chance of avoiding a recession, that outcome depends heavily on the success of upcoming trade negotiations, which remain uncertain.

The pressure on retailers reflects fears that discretionary spending could take a hit as economic conditions tighten. The tariff escalation has introduced new volatility into an already fragile outlook for consumer-facing businesses.

Despite broader market ETFs such as SPY, IVV and VOO trading higher on the day, the retail sector has lagged, signaling investor concern over how tariff-driven cost pressures and weak consumer confidence might impact earnings in the coming quarters.

ANF Price Action: Abercrombie shares are down 8.68% at $66.44 at the time of writing, according to Benzinga Pro.