The "Magnificent Seven" tech stocks continued their sell off early Monday as the Trump administration’s global tariff plan rocked markets for a third day.
Tesla ( TSLA ) and Nvidia ( NVDA ) led the group lower, with shares of these two companies falling as much as 7% and 6.4%, respectively.
Apple ( AAPL ) stock fell as much as 5.5% while Meta ( META ) and Amazon ( AMZN ) both sank more than 4% Google ( GOOG ) stock fell more than 2.2% while Microsoft ( MSFT ) fell the least, losing just less than 2%. The declines shed as much as $647 billion cumulatively from Mag 7 firms' market capitalizations.
Amazon, Meta, Google and Nvidia reversed direction shortly after the market open. Amazon led the four upward, gaining 1.6%. Other Mag 7 stocks pared losses.
The Mag 7 declines come amid a broader market crash as investors respond to President Trump’s tariffs.
Last week, Trump unveiled a plan to impose a baseline tariff of 10% on all global imports, which went into effect over the weekend, as well as "reciprocal" tariffs on US trading partners set to take effect Wednesday.
The plan would bring the average tariff rate to almost 30% — the highest in more than 100 years — prompting Goldman Sachs to up their probability estimate of a recession to 45% on Monday as stocks tanked across the board.
For their part, the so-called Mag 7 Big Tech firms shed $1.8 trillion in value last week following the April 2 announcement.
Apollo chief economist Torsten Sløk said in a blog Monday that the group would be hit harder than the S&P 500 by reciprocal tariffs, pointing to the fact that “[r]oughly 50% of earnings in the Magnificent 7 come from abroad.” (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
“That is higher than for the S&P 500, where the share is 41%," Sløk wrote. “With trade making up a bigger share of GDP in the rest of the world than in the US, the trade war will have a disproportionately more negative impact on the rest of the world."
“As a result, the Magnificent 7 will be hit harder on their global earnings than other S&P 500 companies. Their earnings could be even more negatively impacted if Europe retaliates in the form of a digital services tax.”
Each company is set to feel their own particular pain points, too.
Wedbush’s Dan Ives estimated that some 90% of Apple’s iPhone’s are made in China, which is set to face 54% tariffs under the new Trump rules. The stock suffered its worst day since March 2020 last week .
Ives notes Tesla “still derives a considerable amount of its parts/batteries from sources outside the US 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.
Ives wrote in a separate note Monday: “Investors today are coming to the scary realization this economic Armageddon Trump tariff policy is really going to be implemented this week and it makes the tech investing landscape the most difficult I have seen in 25 years covering tech stocks on the Street.”
One bright spot: Many of Nvidia’s products will not be subject to tariffs, according to the latest analysts from Bernstein’s Stacy Rasgon. Most of Nvidia servers are imported from Mexico and are exempt from duties under the US-Mexico-Canada agreement.