The majority of the US stock market is in the red on Thursday as the consequences of Donald Trump’s Tariffs hit hard. The Magnificent-7 stocks are seeing huge drops, led by iPhone developers Apple (AAPL). Apple is down over 8% but fell as much as 9.5% in the opening hours of Thursday’s trading session.
Roughly $2 trillion was erased from the S&P 500 Index on Thursday. Many investing experts are fearful that the new Tariffs could plunge the US economy into a recession. Thus, investors have begun panic-selling stocks, sending share prices down. Apple has a big manufacturing presence in China, which was hit with a 34% import tax. This is the likely reason why it has seen the biggest fall-off among the Mag-7 companies. Conversely, Alphabet (GOOGL) and Tesla (TSLA) have seen the smallest drops but are still in the red.
Few stocks in the US were healthy on Thursday morning. The benchmark index was on pace for its most significant decline since 2022. More than 80% of companies in the S&P 500 were trading lower at 11 a.m. in New York, with nearly two-thirds of its 500 stocks down at least 2%. “There’s really not anybody getting spared in absolute terms,” said Garrett Melson, a portfolio strategist at Natixis Investment Managers Solutions. “You’re just wrapped up, today at least, in a broad de-risking, and so it’s kind of just across the board taking chips off the table.”
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“The magnitude of the tariffs announced is much higher and broader than anticipated,” JPMorgan analysts wrote Thursday about Apple (AAPL). As a result, they wrote, “price increases to offset the headwinds will be more than just modest.”The analysts estimated that Apple would have to raise its prices by 6% to mitigate the impact of tariffs if the company isn’t given an exemption.
While Apple went unscathed by Trump’s 2018 tariff plan, this time around, the iPhone maker wasn’t as lucky. The drop will likely continue into the weekend, as Magnificent-7 stocks are down for the count.