Markets reprice tech giants after 90-day pause in trade war slashes reciprocal tariffs
Shares in the so-called “Magnificent Seven” tech giants surged on Monday as investors welcomed news of a 90-day trade truce between the United States and China, with sweeping tariff reductions lifting sentiment across global markets.
Amazon, Tesla, Meta, Apple, Nvidia, Google, and Microsoft all posted strong gains after the agreement slashed reciprocal tariffs from as high as 145% to 10%—an outcome analysts described as better than even the most optimistic expectations.
Tech rally leads Wall Street
Amazon (NASDAQ: AMZN) led the charge, closing 8.07% higher at US$208.64, followed closely by Meta Platforms (NASDAQ: META), which jumped 7.92% to US$639.43. Tesla (NASDAQ: TSLA) also saw a sharp rebound, rising 6.75% to US$318.38, with investors re-evaluating the electric vehicle maker’s China exposure in light of the eased tensions.
Apple (NASDAQ: AAPL), which had previously warned of margin pressure due to tariffs, rose 6.31% to US$210.79, buoyed by optimism that its China-based supply chain—responsible for 90% of iPhone production—would face fewer cost headwinds.
Nvidia (NASDAQ: NVDA) added 5.44% to US$123.00, despite remaining concerns around U.S. export restrictions on its H20 AI chips to China. Google parent Alphabet (NASDAQ: GOOGL) gained 3.37% to US$159.58, while Microsoft (NASDAQ: MSFT) rose a more modest 2.4% to US$449.26.
Collectively, the group added hundreds of billions in market capitalisation in a single session, clawing back losses from April when Trump’s initial “reciprocal tariff” plan wiped out over US$2 trillion from their combined market caps.
Policy pivot lifts pressure on supply chains
Under the truce announced after two days of high-level talks in Geneva, the U.S. agreed to temporarily reduce tariffs on Chinese imports from 145% to 30%, with China cutting its retaliatory tariffs from 125% to 10%. A 20% fentanyl-related tariff remains in place, and the pause is set to last 90 days while broader trade negotiations continue.
The rollback significantly eases pressure on multinational tech firms with deep China exposure. Analysts estimate that approximately 30% of the total value of goods sold on Amazon comes from China, while Chinese sellers represent 14% of Amazon’s ad revenue. Meta and Google also rely heavily on Chinese advertisers, accounting for roughly 11% and 6% of their ad spend respectively.
Wedbush analyst Dan Ives described the truce as a “very bullish” development, writing that it “removes a key overhang on tech supply chains.” He emphasised that Tesla, in particular, sources a significant portion of its components from Chinese suppliers.
“There’s more wood to chop around chip restrictions (H20/Nvidia) and other issues in the AI trade that need to be addressed as part of a broader deal,” Ives cautioned.
Tesla rebound follows months of uncertainty
Tesla’s rally marked a turning point after a rocky few months for the automaker, which had been caught in the crossfire of Trump’s tariff war. Though Tesla builds its U.S.-market cars domestically, it still relies heavily on imported components. Analysts estimate 13–20% of the content in Tesla’s U.S. vehicles comes from overseas, much of it from China.
CEO Elon Musk has consistently opposed tariffs, calling for “lower tariffs rather than higher tariffs” during the company’s April earnings call. Musk reportedly raised concerns directly with the Trump administration earlier this year, warning that sudden cost increases could disrupt supply chains.
Apple holds talks with Trump
Apple CEO Tim Cook spoke directly with President Trump on Monday morning, following the announcement. Trump told reporters that Cook “is going to, I think, even up his numbers,” referencing Apple’s prior pledge to invest US$500bn in U.S.-based operations. That expansion includes assembling AI servers in Houston and sourcing more U.S.-bound iPhones from India.
Apple received partial tariff exemptions for iPhones and other key products back in April. But Monday’s broader rollback helps the company sidestep further risks as its China-based production lines remain integral to operations. China accounted for 17% of Apple’s revenue in 2024.
Still, according to The Wall Street Journal, Apple is weighing a potential iPhone price increase this fall to offset cost pressures.
Nvidia remains in focus amid export controls
Nvidia’s recovery came despite ongoing restrictions on chip exports to China, particularly its H20 series of AI chips. The firm is heavily exposed to Chinese demand—analyst Gil Luria estimates 20–40% of Nvidia’s end customers are China-based.
While the tariff rollback provides relief on physical imports, the chipmaker’s future sales prospects remain tied to export policy developments. Analysts believe chip restrictions could become a central issue in further U.S.-China trade talks.
Outlook: relief rally or sustained trend?
Analysts cautioned that while Monday’s rally was significant, its sustainability will depend on whether the U.S. and China can convert the temporary truce into a long-term agreement. The White House has indicated that tariff levels could increase again if negotiations stall.
Still, for now, the market has welcomed what one strategist called “a dream scenario”—an unexpectedly deep cut in trade barriers at a moment of rising macroeconomic concern.
“This morning is a huge win for the bulls,” said Wedbush’s Ives. “New highs for the market and tech stocks are now on the table in 2025.”
