This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every morning along with:
The chart of the day
What we're watching
What we're reading
Economic data releases and earnings
"Liberation Day" came early. Wall Street hinted at the start of a comeback in the hopes that President Trump’s next round of April 2 tariffs will be narrower than many had feared. Investors are scrambling back into Big Tech, and for good reason. The recovery doesn't have to wait for the tariff deadline. The inklings of them not happening is enough.
The swift tumble of the Magnificent Seven and the not-so-magnificent puns that followed bolstered the case for the end of the AI trade. The shock of DeepSeek's success and the frustration over ballooning investment costs without clear returns was the kindling for Big Tech's unraveling. Talk of a new high-tariff era was the spark. But a change of heart speaks to the allure of seeing any setback as a buying opportunity. And it gets at the staying power of trillion-dollar enterprises.
When the market was down, with steep tariffs as the backdrop, the AI trade was unwinding. Under a more limited set of duties, however, beaten-down stock prices now look like excuses to buy back in. If you can wait out the trough, why not buy AI stocks on sale?
But after so much uncertainty, any clarity — for tech, for the market, for businesses, and for consumers — will come with a big asterisk.
It helps that the perceptions of a gentler tariff regime are coming directly from the White House. Trump administration officials have tried to spread the message that the market may be overreacting to the scope of the reciprocal tariffs. Several reports in recent days signaled that the levies will be more targeted than the president has let on, focusing instead on specific countries, about 15% of nations, with persistent trade imbalances with the US.
The market rejoiced at this semblance of clarity — but there’s a “for now” coming. After four weeks of losses, coinciding with Wall Street's response to Trump’s global trade remake, it’s hard to tell if this is the start of a revival or just the latest gyration in an erratic narrative of threats, walk-backs, anticlimaxes, and muddled deals.
Is the clever move to follow the White House’s cues to get ahead of the deadline? Or to wait and see how the cement dries? This is a market that has been burned before.
"Investors shouldn’t be overly optimistic yet," said Mark Hackett, chief market strategist at Nationwide. "V-shaped recoveries are rare, and sustained stabilization typically requires a period of sideways movement before confidence can fully return."
But for the tech optimists out there, the peeling back of trade uncertainty leaves the fundamental case for the tech giants intact: a wide moat around the business, an array of recurring revenue streams, and a perception of irreplaceability.
In one sense, the ticking time bomb of tariffs will come as a relief. The next phase of the tech trade follows reset expectations with more modest valuations, alongside revenue growth and a reinvigorated sense of urgency around AI innovation and supremacy.
Investors for the past month were confronted with new reasons to sell. When peak tariff uncertainty subsides, it should become more clear why they bought in the first place.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
Comments