Jefferies turned cautious on the airline sector on Tuesday. The firm warned that consumer sentiment continues to disappoint and pointed out that tariffs, which take effect this week, could impact continue to impact investor confidence.

Key Takeaways Jeffereis downgraded American, Delta, and Southwest, sending shares of all three companies lower.The analysts called consumer sentiment "disappointing" and pointed to rising uncertainty around tariffs.

Jefferies analyst Sheila Kahyaoglu on Tuesday downgraded American and Delta's stocks to hold from buy, and cut Air Canada and Southwest to underperform. United is now the only airline stock Jefferies rates as a buy because it has opportunity beyond 2025,