U.S. tech stocks have fallen more than 7% since President Donald Trump was inaugurated. New tariffs imposed by the new U.S. administration have sparked a trade war, heightening uncertainty on Wall Street and driving investors out of risky assets.
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Economists warn that trade barriers could fuel inflation and hurt the global economy, while investors are dumping tech stocks that had been on a strong run since Trump’s election victory. Amid these concerns, the S&P 500 Technology Index fell 1% on Tuesday, adding to a 3.5% drop in the previous session. The index has fallen 7.6% since the start of the year, CNBC reports.
One of the key issues has been rising manufacturing costs for big tech companies like Apple and Nvidia, which assemble their products outside the U.S. Nvidia shares fell nearly 9% on Monday, and the company has lost more than 17% of its market value since Trump’s inauguration. In an effort to improve its position, Nvidia plans to shift some manufacturing to the U.S. and will make some chips at TSMC’s upcoming Arizona fabs.
Overall, the semiconductor sector has come under significant pressure. The VanEck Semiconductor ETF has fallen nearly 14% since January, while AMD shares have lost about 20%. Broadcom and Marvell Technology have seen even bigger declines, down more than 21% and 31%, respectively.
Other tech giants are also suffering serious losses. Tesla has lost a third of its value. Alphabet has fallen by 15%, while Microsoft and Amazon have each fallen by at least 10%. The only company that managed to stay in the black was Apple, whose shares rose by 3%.
Meanwhile, Trump ruled out compromise, reaffirming 25% tariffs on Canadian and Mexican goods, saying there was “no room” to discuss alternatives after weeks of negotiations. An additional 10% tariff on Chinese goods was also imposed.
All three countries have responded to the new tariffs. Canada said it would impose retaliatory tariffs as early as Tuesday, and Mexico is set to announce its plans on Sunday. China has also hit back, imposing tariffs of up to 15% on some U.S. goods.