What happened

Shares of Kohl's (KSS 1.38%), J.C. Penney (JCPN.Q), and Bed Bath & Beyond (BBBY) fell as much as 5.5%, 12.4%, and 6%, respectively, on Thursday afternoon despite a relative lack of negative company-specific news. Though Kohl's and Bed Bath & Beyond largely recouped their losses in the final minutes of trading to close down less than 2%, J.C. Penney still closed down a steep 7.5%.

There were no press releases, SEC filings, or other negative developments that typically cause such declines. But after enjoying a strong rally the day after Christmas on encouraging holiday-shopping-season data, retailers pulled back hard as major market indexes swung wildly today. The SPDR S&P Retail ETF (XRT -1.09%) slumped as much as 3.7% early today, for example, before mostly recovering to close down just 0.3%.

Person walking in an outdoor shopping center and holding multiple shopping bags in his hand.


So what

That said, one possible culprit for today's declines could be heightened trade tensions between the U.S. and China as President Trump reportedly mulls a ban on telecommunications products from Huawei and ZTE. Of course, those products don't directly affect the aforementioned retailers. But Bed Bath & Beyond shares have plunged multiple times in recent months as investors fret over the wide-reaching impact of U.S. tariffs imposed on imported Chinese products.

Meanwhile, when J.C. Penney reported disappointing third-quarter results in mid-November (including a 5.4% comparable-store sales decline), the company warned investors that its holiday quarter wasn't likely to do them any favors as it takes the necessary steps in its "lengthy process" to return to sustained, profitable growth.

Kohl's Q3 results were comparatively strong, with a 2.5% increase in comps helping total revenue climb 1.3% year over year. Kohl's also raised its full-year outlook. CEO Michele Gass noted that the company's strong execution both in stores and online left Kohl's "well-positioned going into the fourth quarter." Nonetheless, its shares sank 11% in November, then continued to drift lower this month as the market collectively shrugged in response.

Now what

To be clear, the 2018 holidays were exceptional for many retailers. According to a report yesterday from Mastercard SpendingPulse -- which studies retail spending trends across all payment types -- holiday sales climbed 5.1% year over year to over $850 billion, good for the season's highest growth in the past six years.

But that growth also was bolstered by e-commerce, as online sales climbed 19.1% year over year. Meanwhile -- and this likely contributed to today's retail-centric declines -- SpendingPulse noted department stores actually saw total sales fall 1.3% from 2017, as lower sales from their shrinking number of brick-and-mortar locations were more than offset by healthier 10.2% growth from their respective online platforms.

In the end, we'll obviously know more when Kohl's, J.C. Penney, and Bed Bath & Beyond release their final holiday-quarter results in the coming months. But it's no surprise to see their shares slipping in the meantime given our volatile markets and uncertainty surrounding the general state of the retail industry.