Tech stocks plummeted on Thursday, with Apple (AAPL) leading "Magnificent Seven" names lower following President Trump's reciprocal tariff announcement the day prior.
Shares of Apple, on track for their worst day since March 2020, cratered over 8% in afternoon trade as the stock erased $300 billion from its market cap. The largest risk, according to analysts, centers on the iPhone maker's overseas production hubs, which are particularly vulnerable to the tariffed countries.
On Wednesday, Trump announced tariffs that will impact some 185 countries, including the United States's largest trading partners. Additional reciprocal tariffs, for instance, will include 34% tariffs on Chinese imports, a 20% tariff on European Union imports, a 46% tariff on imports from Vietnam, 32% on imports from Taiwan, and 26% on India — all set to take effect on April 9.
Notably, the additional 34% tax on China will be added to the country's existing 20% tariff, meaning its total tariff rate will rise to 54%. China is Apple's most important production hub, with about 85% of its iPhones manufactured there.
"Apple produces basically all their iPhones in China, and the question will be around exceptions and exemptions on this tariff policy if those companies are building more operations, factories, and plants in the US like Apple announced in February," Wedbush analyst Dan Ives said in a note to clients following the announcement.
As trade tensions escalate, Apple has moved to increase its supply chain beyond just China, boosting manufacturing in places like India and Vietnam. But with the new tariff announcements set to impact those countries too, there's now limited room for reprieve.
"The worry will be around pricing and margin impacts along with what this means for the global supply chain looking forward," Ives said. For now, the analyst continues to believe major negotiations will happen over the coming months as companies attempt to navigate "this new world of tariffs."
Until then, he warned, "tech stocks will clearly be under major pressure."
Other Magnificent Seven players also faced significant selling action. In aggregate, that cohort of stocks is currently on track to eliminate over $800 billion from their collective market caps.
In afternoon trade, Amazon (AMZN) and Nvidia (NVDA) each fell 7%, followed by a 6% drop in both Alphabet (GOOGL) and Tesla (TSLA). Meta (META) dipped 3%, while Microsoft (MSFT) was off just under 2%.
Outside of the Mag Seven, chip stocks faced similar declines, despite the exemption of semiconductors from Trump's additional tariffs. Nvidia competitor Broadcom (AVGO), for example, erased well over $50 billion from its market cap following an 8% drop in shares.
"The implications [of the announced tariffs] are broad-reaching, and we see negative implications for the whole [chip] sector," KeyBanc analyst John Vinh wrote in a note to clients. "These are most notably going to negatively impact end-demand in key markets including smartphones/iPhones and PCs, as a significant amount of manufacturing is done within China."
Stacy Rasgon, Bernstein's managing director and senior analyst, added in an interview with Yahoo Finance that the biggest headwind for semiconductors is not necessarily the direct impact of tariffs. Rather, it's the risk of demand destruction as these products become more expensive.
He added, "The other risk for semis is that they are very cyclical, very global, and very correlated to the macro and to GDP. So if this tips us into recession, that's probably not going to be great."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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