Apple takes the hit as tariff shocks wipe $1 trillion off big tech
Apple led a dramatic selloff in tech stocks on Thursday after president Donald Trump’s sweeping new tariffs sparked panic across Wall Street, sending the Nasdaq to its worst day in years and wiping $1 tillion off the so-called Magnificent Seven.
Apple shares plunged 8.3 per cent – their steepest single day drop since the pandemic-era – after the White House unveiled ‘reciprocal’ tariffs on imports from countries like China, Vietnam and India.
The Iphone-maker, which manufactures nearly all of its products overseas, was seen as particularly exposed.
More broadly, the tech-heavy Nasdaq composite fell nearly six per cent, while Amazon dropped 7.2 per cent, Nvidia 6.2 per cent, Meta 5.8 per cent, and Tesla 4.3 per cent.
Microsoft and Alphabet also took hits, down 1.4 per cent and 3.1 per cent respectively.
“This is going to be a cyclone of demand destruction”, warned Richard Kramer of Arete Research.
Apple in the crosshairs
Apple relies on international production for the vast majority of its devices, which make up more than 75 per cent of the company’s nearly $400bn in annual revenue.
Analysts have warned that if Apple absorbs the new 54 per cent tariff on Chinese imports without raising prices, its annual net profit could fall by as much as 14 per cent.
Alternatively, it may pass those costs onto customers.
A standard $1,000 Iphone could shoot up to around $1,300, TD Cowen estimated – raising fears of dampened demand in an already increasingly competitive market.
“This is Apple’s worst day in five years”, one analyst told the New York Times. “The company is effectively trapped between profit margins and consumer psychology.”
There is currently no indication Apple will receive an exemption, unlike in 2018 when it was spared similar levies under Trump’s first administration.
That silence had triggered a flurry of forecast downgrades among Wall Street analysts.
Supply chain gridlock
Jefferies analysts said the tariff shock has already disrupted Apple’s supply chain, with suppliers facing uncertainty over their role and margins.
Apple has committed to investing $500bn in the US over the next four years, a move some say could help it secure political goodwill. But it won’t solve the immediate problem.
“You can’t re-architect a global supply chain in a quarter”, said Kramer. “Apple’s 2026 production plans are already locked in. These tariffs hit today.”
‘Obliteration day’ for big tech
Trump framed his announcement as ‘Liberation Day’, declaring 2 April as “the day America’s destiny was reclaimed.”
But on Wall Street, traders dubbed it ‘Obliteration Day’, as markets sank in tandem with sentiment.
The S&P 500 fell 4.8 per cent and the Dow dropped 3.9 per cent. Futures further declines on Friday, and volatility indices spiked as fears of tech-led earnings recession grew.
As the clock ticks towards Saturday’s roll-out of baseline tariffs and 9 April introduction off reciprocal levies, the tech sector faces a new era of headwinds.