nvidia and tech giants show resilience amid tariff turmoil
San Francisco, Wednesday, 5 February 2025.
Nvidia and other prominent tech stocks, known collectively as the ‘Magnificent Seven,’ demonstrated resilience despite the Trump administration’s new tariffs. These tariffs, targeting major trade partners like Canada, Mexico, and China, have introduced significant market volatility. Yet, stocks such as Apple and Microsoft continue to hold firm. The tariffs could influence trading dynamics in the near future, but the sheer market influence of these tech giants keeps them steady. Their performance is particularly crucial as they heavily impact the Nasdaq composite due to their large market capitalizations. Meanwhile, Google parent Alphabet reached new highs ahead of earnings, underscoring the mixed results among these top stocks. While the tariffs aim to address trade imbalances, questions remain about their broader economic impact, especially on American consumers. Investors are left watching how these global trade tensions unfold and affect the broader market.
Market impact of new tariffs
The implementation of Trump’s new tariffs has sent ripples through global markets, with China announcing retaliatory measures of 15% tariffs on US coal and natural gas, and 10% on crude oil [3][4]. Despite these trade tensions, the Magnificent Seven stocks have shown remarkable stability. Goldman Sachs analysts predict the broader market could see a 5% decline in the short term due to tariff impacts [6].
Tech sector resilience
While global markets face uncertainty, Alphabet hit new highs ahead of earnings [1]. This performance comes as Trump’s 10% tariff on Chinese imports took effect on February 4, 2025 [2][5]. The tech giants’ market influence remains substantial, with their outsized capitalizations significantly impacting the Nasdaq composite [1].
Trade tensions escalate
China’s response to US tariffs extends beyond conventional trade measures. Beijing launched an antitrust investigation into Google and implemented export controls on rare metals crucial for technology manufacturing [4][5]. These actions signal an escalating trade conflict that could impact global supply chains, though major tech companies maintain their market positions [3].