The U.S.–China trade relationship has always been a focal point for market watchers, but the latest 90-day truce between the two economic giants has reignited investor optimism, especially for America’s largest tech companies. On Monday, Big Tech rebounded dramatically as the so-called “Magnificent Seven” rallied sharply.
The surge came immediately after announcements that both countries would ease their tariff policies, at least temporarily. Anna Tutova, A financial strategist from Maverix Global, takes a closer look at the deeper implications of this market rebound and the potential risks that remain on the horizon.
Tech Titans Rally After Tariff Reprieve
image from finance.yahoo.com
Markets responded with unfiltered enthusiasm as news broke of the temporary truce. Amazon surged 8.1%, leading the charge among the “Magnificent Seven,” followed closely by Meta, which climbed 7.9%. Other tech giants were not far behind: Tesla jumped 6.8%, breaching the $1 trillion market capitalization mark, while Apple gained 6.3% and Nvidia soared 5.4%, coming within striking distance of a $3 trillion valuation, its highest since February.
Meanwhile, Google added 3.4% and Microsoft increased 2.4%, with the latter reaching its highest closing price of 2025 at just over $449 per share.
These rebounds come as investors breathe a collective sigh of relief, with the belief that the truce will mitigate supply chain disruptions and cost pressures, especially for companies with deep manufacturing or revenue ties to China.
Temporary Policy Shift: Tariffs Rolled Back, For Now
The catalyst behind this tech rally is a 90-day tariff rollback following high-level discussions between the U.S. and China. The U.S. agreed to reduce tariffs on Chinese imports from 145% to 30%, while China reciprocated by cutting retaliatory duties on American goods from 125% to 10%.
While temporary, the policy change is seen as a vital window for diplomacy and potentially more permanent restructuring of trade relations.
This development is particularly bullish for sectors heavily reliant on international supply chains, such as consumer electronics, electric vehicles, and cloud infrastructure.
Why Tech Reacted So Quickly and Sharply
To understand the rapid surge, one must examine the tech sector’s exposure to China. Consider these figures:
- Amazon sources roughly 30% of the total value of goods sold on its platform from China, and in 2024, 14% of Amazon’s ad revenue came from Chinese advertisers.
- Meta and Google each see 11% and 6% of ad revenue, respectively, coming from Chinese marketers.
- Apple manufactures about 90% of its iPhones in China, with the Chinese market contributing 17% of total revenue in 2024.
- Analysts estimate that between 20% and 40% of Nvidia’s end customers are Chinese companies.
Given these dependencies, any reduction in trade tension directly improves business stability, revenue projections, and investor confidence.
The April Shockwave: From Panic to Partial Recovery
This week’s upswing is a stark contrast to what happened just over a month ago. After America’s current president announced a “reciprocal tariff” strategy on April 2, the tech sector shed a staggering $2 trillion in cumulative market capitalization. The damage escalated further on April 5, when a blanket 10% tariff on all global imports took effect.
Though the president’s tariff package included an exemption for electronics, sparing most of Apple’s product line, the initial shockwaves caused immense uncertainty. Additional friction arose when the U.S. imposed export restrictions on Nvidia’s H20 chips to China, threatening to hinder the AI chipmaker’s massive growth trajectory.
Remaining Tensions in the AI and Semiconductor Space
While the broader tech sector has found temporary relief, the AI and semiconductor industries remain under scrutiny. The H20 chip export ban remains a red flag for investors in Nvidia and other chipmakers. As a Finstera strategist highlights, “the trade truce does little to address long-term structural rifts in AI technology access and intellectual property concerns.”
Indeed, the semiconductor narrative remains complex, with potential for additional tariffs, export bans, and geopolitical tug-of-war. The trade war’s AI chapter is far from closed, and that uncertainty continues to hover over companies like Nvidia, AMD, and Intel.
Outlook: What Comes After the 90 Days?
The 90-day window represents more than just an economic pause—it is a test. Will both countries use the time to establish firmer ground, or will this be yet another delay before tensions resurface?
Key questions for the market include:
- Will the current U.S. administration pursue deeper concessions from China beyond tariff reductions?
- Can Chinese firms maintain access to advanced U.S. technologies, particularly AI and semiconductors?
- How will global investors respond if talks collapse and the 145% tariff returns?
The answers to these questions will dictate the next leg of the tech sector’s journey—and whether the rally has long-term legs or is merely a bounce amid volatility.
Conclusion
In this fragile equilibrium, optimism and caution coexist. On one hand, Big Tech’s performance this week reflects just how sensitive markets are to trade policy shifts. The Amazon and Meta surges reflect restored investor confidence, but only temporarily. The 90-day truce has bought time, but not resolution.
Critical exposure to China, tariff vulnerability, and semiconductor export limitations remain core concerns. The rebound may feel like a win, but it is more a reprieve than a victory.
Ultimately, markets are holding their breath—hoping that diplomacy turns a truce into a transformation, and that the next headlines inspire stability instead of uncertainty.
