  We report the synthesis and characterization of a rare-earth dichalcogenide
EuTe$_2$. An antiferromagnetic transition was found at T$_M$ = 11 K. The
antiferromagnetic order can be tuned by an applied magnetic field to access a
first-order spin flop transition and a spin flip transition. These transitions
are associated with a giant negative magnetoresistance with a value of nearly
100\%. Heat capacity measurements reveal strong electronic correlations and a
reduced magnetic entropy. Furthermore, density functional theory calculations
demonstrate that the electrons near the Fermi surface mainly originate from the
Te 5$p$ orbitals and the magnetism is dominated by localized electrons from the
Eu 4$f$ orbitals. These results suggest that both the RKKY and Kondo
interactions between the local moments and itinerant electrons play crucial
roles in the magnetism and large negative magnetoresistance of EuTe$_2$.
