CNH Industrial Plummets 5.8% as Tariff Headwinds and Sector Weakness Collide

Summary
• CNH Industrial (CNH) plunges 5.8% to $12.085, breaking below its 200-day moving average of $12.31
• Sector leader Deere (DE) drops 6.9%, amplifying fears of U.S. tariff impacts on farm equipment demand
• Options chain shows heightened volatility, with CNH20250919P10 put option surging 70% in turnover

Today’s sharp selloff in CNH Industrial reflects a perfect storm of sector-specific tariffs, weak demand, and broader market jitters. The stock’s intraday low of $11.955 signals a breakdown in key support levels, while the sector’s collective struggle—led by Deere’s 6.9% decline—underscores the fragility of the farm equipment market amid shifting trade policies and soft commodity prices.

Tariff Turmoil and Sector-Wide Downturn Drive CNH’s Sharp Decline
CNH’s 5.8% drop is driven by twin forces: U.S. tariffs on farm equipment and a sector-wide slump in demand. Recent news of Deere’s third-quarter profit decline—attributed to Trump-era tariffs and soft crop prices—has spooked investors. CNH itself warned earlier this month that annual sales could fall below 2024 levels, compounding fears of margin compression. The stock’s breakdown below the 200-day moving average of $12.31 has triggered algorithmic selling, while the 42 RSI reading suggests oversold conditions may not yet justify a rebound.

Deere’s 6.9% Drop Anchors Farm Equipment Sector Amid Tariff Fears
Deere’s 6.9% intraday decline—its worst since the 2022 market slump—has dragged the entire farm equipment sector lower. CNH’s 5.8% drop mirrors this trend, with both companies facing similar headwinds from U.S. tariffs and declining farmer spending. While CNH outperformed Deere in Q2 earnings, its guidance for weaker sales and margins has failed to reassure investors. The sector’s collective struggle highlights the vulnerability of capital-intensive equipment makers to macroeconomic shifts and regulatory changes.

Bearish Options and ETFs Highlight Volatility Playbook
• 200-day average: 12.31 (below) • RSI: 42.02 (oversold) • MACD: -0.14 (bearish) • Bollinger Bands: 12.17–13.40 (breakdown confirmed)

Key levels to watch: The 200-day MA at $12.31 and the 52-week low of $9.69. Short-term technicals suggest a continuation of the downtrend, with the RSI near oversold territory offering limited near-term relief. The CNH20250919P10 put option (strike $10, expiring 9/19) stands out with a 37.8% implied volatility and 403.67% leverage ratio, ideal for a 5% downside scenario where payoff would be $2.085 (ST= $11.04).

• CNH20250919P10 (Put): Strike $10, Expiry 9/19, IV 37.8%, Leverage 403.67%, Delta -0.047, Theta -0.00155, Gamma 0.0678, Turnover 40
- High leverage and gamma make this contract sensitive to further price drops
- IV suggests market pricing in moderate volatility, aligning with current bearish momentum

• CNH20251219C12.5 (Call): Strike $12.5, Expiry 12/19, IV 32.6%, Leverage 15.14%, Delta 0.487, Theta -0.00442, Gamma 0.1693, Turnover 400
- Moderate delta and high gamma position this for a potential rebound above $12.50
- IV and turnover suggest liquidity for entry/exit, though leverage is lower than the put

Aggressive bears may consider CNH20250919P10 into a breakdown below $12.00, while bulls could test CNH20251219C12.5 for a bounce above the 200-day MA.

Backtest CNH Industrial Stock Performance
The CNH has historically shown positive short-to-medium-term performance following a -6% intraday plunge. The backtest data reveals that the 3-day win rate is 57.04%, the 10-day win rate is 60.00%, and the 30-day win rate is 68.15%. Additionally, the average returns over these periods are 0.70% for 3 days, 1.70% for 10 days, and 3.72% for 30 days, indicating a tendency for the currency to rebound and even exceed its previous levels.

CNH’s 5.8% Drop Signals Sector-Wide Weakness—Watch $12.00 Support
CNH’s sharp decline reflects a sector in distress, with tariffs and soft demand creating a toxic mix for equipment makers. The breakdown below $12.00 and 200-day MA suggests further downside toward the 52-week low of $9.69, while the sector leader Deere’s 6.9% drop amplifies the bearish case. Investors should monitor CNH’s ability to hold above $12.00 and watch for follow-through selling in the farm equipment sector. For now, the CNH20250919P10 put option offers a high-leverage play on continued weakness, while bulls may test the 12.50 call for a potential rebound.