The "Magnificent Seven" technology stocks continued to drop at the start of the week due to the global tariff proposal by the Trump administration, which has caused turmoil in the markets for a third consecutive day.
Tesla and Nvidia were the top decliners among the group, with their shares falling by around 7% and 6.4% respectively.
Apple saw a decline of up to 5.5%, while Meta and Amazon both experienced drops of over 4%.
Google's stock decreased by more than 2.2%, and Microsoft recorded the lowest decline at just under 2%.
Investors are reacting to President Trump's tariff plans, which involve imposing a 10% baseline tariff on all global imports starting over the weekend, along with implementing "reciprocal" tariffs on U.S. trading partners effective from Wednesday.
This move would raise the average tariff rate to nearly 30%, the highest in over a century, causing Goldman Sachs to increase the likelihood of a recession to 45% on Monday, resulting in a widespread decline in stocks.
The so-called Mag 7 Big Tech companies lost $1.8 trillion in value last week following the announcement on April 2.
An economist from Apollo, Torsten Sløk, indicated that the Magnificent 7 would be more severely impacted by reciprocal tariffs compared to the S&P 500 due to approximately 50% of their earnings coming from overseas. This is higher than the S&P 500, where the foreign earnings share is 41%, and the global trade war could have a disproportionately negative effect on the rest of the world.
Regarding individual companies, Apple faces challenges with 90% of its iPhones being manufactured in China, which may encounter 54% tariffs according to the new rules. Tesla sources a significant amount of its parts from outside the U.S., including China, making it vulnerable in the ongoing trade tensions between the two countries.
The situation has led to uncertainties in the tech investment landscape, with Wedbush's Dan Ives highlighting the complexities brought by the tariffs, labeling it as one of the most challenging situations he has faced in his 25-year career covering tech stocks.