President Trump gave a speech from the Rose Garden after market close on Wednesday, April 2nd, which he declared as “Liberation Day.” He demonstrated how much other countries have been imposing tariffs on US goods of anywhere from 10% to over 300% and how the US will be responding with reciprocal tariffs (discounted from par) until those countries lowered their tariffs accordingly.
As of this morning, the stock market is seeing a selloff, with the Dow Jones average off nearly -1,400 and the S&P 500 down, -22.00. Ironically, President Trump praised Apple (NASDAQ: AAPL) and Meta Platforms (NASDAQ: META) by name, and those stocks, along with Magnificent 7 compadre Microsoft (NASDAQ: MSFT), are all leading the indexes down on today’s selloff.
Cramer Says Trump’s US Economic Agenda Outweighs Stock Market Concerns
President Trump’s announcement on reciprocal tariffs are impacting tech stocks like Apple, which makes most of its products in countries that will be subject to higher import prices from the tariffs.
Weeks ago, Apple announced hundreds of billions of fresh investment in the US to bring manufacturing back to the US, since its best selling iPhones and iPads are made overseas, as are many components for its iMac computers, all of which would be impacted by tariffs. While Apple has shifted manufacturing away from China of late, the tariffs will impact its products from the alternate supplier nations, which include: Malaysia, Vietnam, Thailand, India, and Ireland.
Led by its new Trump fanboy CEO Mark Zuckerberg, Meta Platforms also pledged $500 billion in US investment for further R&D and data server manufacturing for its AI platforms. However, its guidance indicated some foreign exchange concerns regarding its overseas operations, and the new tariffs can conceivably exacerbate Meta’s forex issues.
Microsoft’s fall, while sympathetic with other Magnificent 7 stocks, may have its own underlying reasons. There was a news article today that Microsoft had frozen its data center projects in North Dakota, Illinois, Wisconsin, UK, Australia, and Indonesia. No reasons have so far been announced, but TD Cowen analysts noted that hundreds of megawatts worth of power leases Microsoft had under contract were terminated several weeks ago, leading to speculation on the future of the data center projects, and if there were any further cracks in the pavement underneath.
CNBC’s Jim Cramer has mentioned on past occasions that the market tends to close too high on unjustified optimism, and yesterday’s close saw the Dow close over +235.00 – minutes before President Trump’s speech. Post speech after market and futures trading anticipated today’s selloff.
Cramer has stated that Trump doesn’t care about the short term stock market concerns, and that investors may wish to shift into Walmart or other companies in the interim. He said that while he understood Trump’s broader agenda of reviving manufacturing and domestic business investment as necessary for the economic health of the country, the equity market’s turbulence will likely be with us for the next few weeks, at least.
Scott Bessent is Watching the 10-Year Treasury
The other part of the equation being lost in the discussion is Treasury Secretary Scott Bessent’s focus on the US 10-year Treasury Bond. As the stock market has been selling off, the 10 year bond yield has dropped to the magic 4.00% level, which is key for cutting interest rates by Fed Chairman Powell. The tax cuts proposed by President Trump, combined with lower overall interest rates, will further stimulate domestic US businesses across the board, and will help to mitigate fears of price hikes.
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