Apple (AAPL) bore the brunt of the market’s reaction to President Donald Trump’s sweeping tariff announcement, tumbling nearly 10% to $202.52 in early trading on Thursday.
The company’s steep losses outpaced declines in the broader tech sector as investors digested the implications of new tariffs, including a 34% levy on Chinese imports, which significantly affects Apple’s supply chain.
Apple’s reliance on China for manufacturing is well known. Between 90% and 95% of Apple’s products are assembled in China, primarily by contract manufacturer Foxconn (Hon Hai Precision Industry). While Apple has attempted to diversify production into Vietnam and India, the new tariffs extend to those regions as well, with Vietnam facing a 46% tariff and India a 26% tariff.
JPMorgan analysts estimate that in order to offset the increased costs, Apple would need to raise iPhone prices by 6%—a move that could hurt demand in an already sluggish smartphone market. If Apple chooses to absorb the costs instead, it could face a 9% hit to its gross margins, according to Citi analysts.
The selloff represents Apple’s worst single-day decline since September 3, 2020, highlighting investor anxiety over the potential disruption to its supply chain and profit margins.
Magnificent Seven Stocks Plunge as Market Reacts to Tariffs
Apple wasn’t the only tech giant affected. The Magnificent Seven—a group of dominant U.S. tech stocks including Apple, Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOG), Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA)—saw broad declines following the tariff announcement.
Apple wasn’t the only tech giant affected. The Magnificent Seven—a group of dominant U.S. tech stocks including Apple, Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOG), Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA)—saw broad declines following the tariff announcement.
- Amazon dropped 9%
- Meta Platforms fell 8%
- Nvidia slid 6%
- Alphabet lost 4%
- Microsoft was down 3%
- Tesla shed 6%
Broader markets also reacted sharply. Nasdaq 100 fell more than 4.7%, while S&P 500 dropped 4.2% as traders assessed the economic risks of the new tariffs. The policy move raised concerns over supply chain disruptions, higher consumer prices, and possible retaliation from key trading partners like China, the European Union, and India.
Will Apple Get an Exemption? What’s Next for Tech Stocks?
Apple and other major U.S. technology companies benefited from tariff exemptions during the first Trump administration. In 2019, Apple successfully lobbied for waivers that spared iPhones, iPads, and MacBooks from a 15% tariff. However, there has been no indication that Apple will receive a similar carveout this time.
Apple’s lobbying efforts could be strengthened by its commitment to U.S. investment. In February, the company announced plans to invest over $500 billion in the U.S. over the next four years, which analysts at Jefferies believe could bolster its case for an exemption.
If Apple is unable to secure a waiver, the company will be forced to choose between raising prices, cutting costs elsewhere, or absorbing the tariff hit—each of which carries risks.
- Raising Prices: Could hurt demand, especially amid a softening consumer electronics market.
- Cutting Costs: Might involve negotiating lower supplier costs, but with limited flexibility.
- Absorbing the Tariffs: Would pressure profit margins, potentially impacting earnings growth.
“The pattern of negative headlines, delayed deadlines, and better-than-feared implementation seems likely to continue,” Kaiser wrote in a client note, cautioning that tariffs will likely remain a “repeated headwind” for tech stocks.
With supply chains in limbo, inflation concerns rising, and fears of economic retaliation looming, investors should brace for heightened volatility in the months ahead.
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!