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Tech Stocks, Led by Apple and Amazon, Plummet Following Tariff Announcement
Technology stocks, including industry leaders Apple and Amazon, experienced significant declines on Thursday as markets absorbed the potential ramifications of newly imposed tariffs announced by the Trump administration on Wednesday evening. These tariffs triggered immediate market apprehension regarding potential impacts on the technology sector and broader economy.
Major Losses for Apple and Amazon Shares
Shares of Apple Inc. witnessed a steep drop of approximately 9 percent on Thursday morning. Should this downward trend persist through the trading day’s close, it would constitute the most substantial single-day percentage decrease in roughly five years, according to CNBC reports. Amazon.com shares similarly suffered a significant setback, plummeting by around 7 percent in morning trading.
Tariffs Pose Risks to Profit Margins and Consumer Costs
Both Apple and Amazon rely extensively on international imports, particularly from countries like China, which are now subject to a newly proposed 54 percent tariff effective April 9th. Moreover, a 46 percent tariff was declared on imports from nations such as Vietnam, where Apple also maintains manufacturing operations.
These tariffs, if not reversed, could translate to elevated prices for consumer electronics, or potentially reduced profit margins for corporations like Apple and Amazon if they opt to absorb a portion of the increased expenses. Apple has historically maintained a gross margin around 38%, although this has varied. Financial analysts on Wall Street are likely expressing concern about diminished consumer purchasing if Apple is compelled to raise retail costs for products such as Macs, iPhones, iPads, and other devices.
Broader Tech Market Reacts to Trade Policy Uncertainty
The repercussions of the tariff announcement extended across the wider technology landscape. Nvidia Corporation shares decreased by more than 4 percent on Thursday morning. Tesla Inc. stock also experienced a downturn of approximately 4 percent, effectively negating the majority of gains realized on Wednesday. Shares of Meta Platforms also registered a significant decline, falling by roughly 7 percent.