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Live: Magnificent 7 Stocks (MAGS) Apple (AAPL) and Meta (META) Still Pressured by Trade Tensions
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24/7 Wall St. Insights:
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Trade tensions between the U.S. and China continue to weigh on the stock market, hitting the Magnificent 7 stocks hard yesterday and pressuring their stocks this morning.
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China has raised tariffs on U.S. imports to 125%, matching the duties Trump imposed on China, but says it will not respond to further increases as trade between the two countries is essentially “no longer viable.”
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Markets Moving Higher
U.S. stock indexes rose with the S&P 500 up 1.4%, the Dow gaining 484 points (1.2%), and the Nasdaq climbing 1.7%, despite earlier volatility driven by trade tensions and poor consumer sentiment. The market’s uptick comes amid China’s retaliatory 125% tariffs on U.S. goods and ongoing uncertainty following a wild week of trading triggered by U.S. tariff policies.
Easy come, easy go. The market’s big winners driving the $5.5 trillion stock market gain on Wednesday turned in its losers on Thursday. All the Magnificent 7 stocks that were up by double-digit percentages the day before were in the red yesterday.
And heading into the market open, all seven tech giants except Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) and Nvidia (NASDAQ:NVDA) are lower before the opening bell.
Trade between U.S. and China dead
The market euphoria the other day quickly turned into despair over the reality of the trade war with China. Both sides are not backing down and are instead ratcheting up the war with harsh rhetoric and even harsher tariffs and restrictions.
President Trump increased trade duties on Chinese goods to 125% and tripled the tariff on small parcels to 90%. Trump accused Chinese online marketplaces like Temu and Shein of abusing the “de minimis” loophole to ship goods to the U.S. duty-free.
China just responded this morning by hiking tariffs on U.S. goods to 125%, and previously said it would restrict the shipment of rare earth minerals. Yesterday it said it would limit the number of U.S. films that could be shown in China.
Trump has yet to respond to China’s latest salvo, but he paused for 90-days his previous tariff hikes on the rest of the world because most countries are willing to negotiate an end to the trade war. As China was the only country retaliating, its tariffs were left in place. Now that China has raised tariffs once more, it’s likely Trump will respond in kind again.
However, China said it no longer matters what Trump does. “Given that, at the current tariff level, U.S. exports to China are no longer commercially viable, China will not respond to any further tariff hikes by the U.S. on Chinese goods.” It’s effectively the same in reverse.
Magnificent No More
It was that sort of fear that this would continue escalating that sent the stock market into reverse yesterday, erasing half the gains of the day before.
Stock market futures, however, are moving slightly higher ahead of the market’s open. Just not the Magnificent 7 stocks.
Apple (NASDAQ:AAPL) is down 2.3% at the open and Meta Platforms (NASDAQ:META) is off 2.1%. Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN) are all down less than 1%.
Alphabet was 0.1% higher with Nvidia up 0.9%.
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