Shares of hotel and casino operator Wynn Resorts (WYNN) - Get Report dropped nearly 5% on Monday amid concerns that the company's sizeable operations in China will be negatively impacted by a deterioration in trade talks between the U.S. and Chinese governments.
Shares of Wynn were down 4.72%, or $6.95, at $40.41 in trading on the New York Stock Exchange.
President Trump sent a two-tweet update on the trade war with China on Sunday evening, saying he plans to increase certain 10% tariffs to 25% this coming Friday. He added that another "untaxed" $325 billion worth of goods would also see a 25% tariff as well. The tweets sent stock markets spiralling on Monday, though the averages recovered somewhat by midday.
Concern that China will retaliate, making casino operators like Wynn with substantial interests in Macau and other regions of Asia, sent Wynn shares sharply lower. The company derives approximately 75% of its revenue from the region, according to FactSet.
Macau casinos brought in $3.2 billion in revenue in March, according to Macau's Gaming Inspection and Coordination, the highest figure recorded so far in 2019. The total represented a 0.4% decline from the same period a year ago.
"The President's willingness to risk a market disruption by threatening an unexpected tariff hike suggests that he might also be willing to risk the disruption that formally proposing auto tariffs or announcing the intent to withdraw from NAFTA might cause," Goldman Sachs said in research report to clients published over the weekend.
Wynn is expected to post per-share earnings of $1.59 when it reports its first quarter results Tuesday. The company reported earnings per share of $2.30 in the same period a year ago.