Big Tech stocks surged for a second day on Wednesday with ‘Magnificent Seven’ firms adding $455 billion to their market capitalizations as the Trump administration hinted at a deescalation of the US-China trade war.
Tesla (TSLA) surged more than 5% Wednesday, leading the way after its CEO Elon Musk said late Tuesday his time spent working for the Trump administration would be reduced “significantly.”
Nvidia (NVDA), Meta (META), and Amazon (AMZN) each jumped around 4%. Apple (AAPL), Google (GOOG), and Microsoft (MSFT) rose in the 2% range.
Wednesday’s gains came after President Trump softened his tone on China and hinted at a potential reprieve from unprecedented 145% “reciprocal” tariffs on imports from the country.
He said the current rate is “too high” and “will come down substantially” during a White House news conference Tuesday. Trump said he plans to be “very nice” to China to reach a deal in trade talks.
Treasury Secretary Scott Bessent separately called the US-China trade war unsustainable during a private event in D.C. on Tuesday. Bessent publicly confirmed that view on Wednesday but denied that the US would consider unilaterally slashing the steep tariffs on Chinese imports.
The Magnificent Seven’s value is now up roughly $843 billion since the market close on Monday. Prior to the tech stocks’ upswing, the group had shed $1.8 trillion between Trump’s reciprocal tariff announcement April 2 and Monday’s close.
Any potential reprieve from Trump’s aggressive, unprecedented approach to trade policy would be good for tech companies, given China’s importance in their supply chain.
Some 90% of Apple iPhones are made in China, Wedbush’s Dan Ives said in a previous analysis. China accounted for 17% of Apple’s revenue in 2024.
Ives also noted in the note to investors earlier this month that Tesla sources a “considerable amount” of parts and batteries from countries including China, and the heightening trade war with China will do little to help the EV company overcome competition from homegrown BYD in one of its most important markets. Tesla’s first quarter earnings report Tuesday missed Wall Street’s expectations.
Meanwhile, 30% of the total value of goods sold on Amazon comes from China, and Chinese advertisers accounted for 14% of total spending on Amazon advertising in 2024, according to Raymond James, which recently downgraded the stock. Chinese advertisers account for 11% and 6% of total ad spending on Meta and Google, respectively.
Meanwhile, DA Davidson analyst Gil Luria estimates that China and Chinese companies represent anywhere between 20% and 40% of Nvidia’s end customers, though he noted in an email to Yahoo Finance that it’s “hard to tell exactly because of how they report [revenue].”