Why Illumina Stock Plummeted Today

Genomic sequencing specialist Illumina (NASDAQ: ILMN) was something of a victim in the U.S.-China trade spat on Tuesday. The government of the sprawling Asian nation placed the U.S. company on a blacklist, and given the size and power of that economy, investors weren't happy about the news. They traded out of Illumina to leave it with a more than 5% price decline, on a day when the S&P 500 (SNPINDEX: ^GSPC) landed in positive territory with a 0.7% increase.

Caught in the middle

China's "blacklist of entities" now has two more entries -- Illumina and fashion conglomerate PVH -- after its government put the companies on notice late Monday. The move is clearly a retaliatory measure following the announcement of tariffs imposed by the Trump administration on Chinese exports.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

As reported by Bloomberg, the country's Ministry of Commerce claimed "that PVH and Illumina infringed the principles of market transactions and undertook damaging actions against Chinese companies." It did not provide any details of these alleged actions.

The news agency quoted an unnamed Illumina spokesperson as saying that it is currently assessing the situation, and it hopes for a "positive resolution."

A big trade spat

The damage to Illumina's stock will depend whether it continues to be included on that rather vague blacklist. And, further into the future, how the broader U.S.-China fight develops -- given the relatively quick semi-resolutions of similar fights with Canada and Mexico -- this one might not last all that long.

Meanwhile, it doesn't seem coincidental that Illumina, which is the most significant genetic sequencing business in the world, has a large Chinese rival in biotech BGI Genomics.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $302,501!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,181!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $527,934!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 3, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Illumina. The Motley Fool has a disclosure policy.