It would be surprising to imagine that the tech and auto stocks would rise amid the tensions of ongoing tariffs. But guess what, after weeks of uncertainty, tech and auto stocks suddenly started hitting the roof.
Well, all of this started when Trump removed tariffs on smartphones and computers imported from China. It was a kind of welcome relief for investors.
But it wasn’t the end of the game. Trump rocked the boat further by hinting that he would release tariffs on auto-related levies. This news again blended a wave of optimism among investors.
From Initial Sell-Off To Confidence Crisis
When President Trump aimed to set the tariff at 25% on imported goods, it sent shockwaves throughout the market. Stocks, dollars and even treasury bonds felt the hit. While things have started to recover, the S&P 500 index is still down 8% this year.
The sudden change in tariff has shaken the confidence of both businesses and consumers. Even though the White House has dialed things back, Trump is firm on his ground, saying that there will be more tariffs on the horizon.
Trump’s Tariff Proposal and Automakers’ Response
On Monday, Trump proposed at the White House talked about modify the tariff of 25% on cars and auto parts coming from Canada and Mexico. Trump admits that car companies need time to adjust and to shift toward U.S.-based manufacturing.
After these comments from Trump, Ford and General Motors’ stock went up by 4.1% and 3.5% respectively. Automakers like Stellion, Ford and GM have vouched their support for manufacturing cars in the U.S, but they have warned that increased tariffs may disturb the supply chain.
Rising Stock Prices in Tech Sector
Big tech companies like Apple have also been caught up in the tariff battle. Apple’s stock went up by 2.2% after recovering from the loss of 9% in the past few weeks. Critics think that if tariff policies continued as same, then the prices of iPhones, which are mainly made in China, could go up a lot.
Other tech stocks like HP and Dell have seen their shares increase by up to 2.6% and 4%, respectively. However, Nvidia faced a little dip despite announcing its huge investment for AI development in the U.S.
It is not only America that got the boost, global companies like Foxconn, Inventec and Quanta, which work closely with Apple and make AI servers, also got the bump.
