Fiddelke, an Iowa native and University of Iowa graduate, has been with Target since 2003, starting as an intern. Investors reacted negatively to the appointment, causing Target's shares to drop over 6%. An Iowa native and University of Iowa graduate will be the new top executive of Target, one of the nation's largest retail chains.

Target promoted insider Michael Fiddelke on Wednesday as its new CEO to turn around the struggling retailer after a series of challenges over recent years that caused its shares to vastly lag those of its peers.

Target has been cutting costs to cope with tariffs, a sign of the tough conditions its next chief will have to navigate.