Nike (NKE) saw a significant drop in its shares on Thursday due to concerns over the impact of the Trump administration's newly imposed tariffs on the company's profits. The stock has been on a downward trend since breaking below the neckline of a head and shoulders pattern back in June, with the price dropping below the 200-month moving average at the beginning of April.

Investors are advised to keep an eye on important support levels at around $50 and $40 on Nike's monthly chart, as well as key resistance levels near $68 and $86. The tariffs imposed on Nike's manufacturing partners in countries like Vietnam, Indonesia, Cambodia, and China have raised worries about increased production costs and consumer prices affecting the company's margins and demand.

Morgan Stanley highlighted the potential impact of tariffs on Vietnam, a significant manufacturing hub for Nike, which produced around half of its footwear there in fiscal 2024. The stock witnessed a 14% decline to $55.58 on Thursday, hitting its lowest level since December 2017 and marking a 27% decrease in value since the beginning of the year. The uncertainty surrounding tariffs and a weak sales outlook have been putting pressure on Nike's shares.