TheDrop Market Analysis, 04/07/25

Markets sank once again due to tariff fears.

The S&P 500 sank 0.2%, the Dow sank 0.9%, and the Nasdaq rose by a meager 0.1%. Meanwhile, the Russell 2000 fell 0.9%. The value of the U.S. dollar weakened while gold strengthened.

Investors once again decided to sell out their stocks due to tariff threats. With no end in sight for the president's reciprocal tariffs, now investors are facing more difficult challenges with the president, Donald Trump, expressing interest in raising some of these tariffs, especially on Chinese goods to urge the negotiation of trade deals. In addition, some opposition is forming in the White House against these tariff policies, namely Elon Musk and Bill Ackman, both of who expressed concern for the economy due to these said tariffs. Also, JPMorgan CEO Jamie Dimon warned investors of slower growth this year in stock prices.

The Magnificent 7 had very mixed performances today. Nvidia rose 3.5%, Google rose 1%, Meta rose 2.3%, and Amazon rose 2.5%. However, Apple fell 3.7%, Tesla fell 2.6%, and Microsoft fell 0.6%. The companies that rely most of China, Apple and Microsoft, fell the most while those that rely least on China, like Nvidia, rose. This goes to show how investors are deciding for themselves which companies will be least affected by a potential trade war brewing in China.

Many Chinese stocks listed on the NYSE fell in response to threats of a trade war, like Xiaomi (14.4%), Tencent (12.5%), and PDD Holdings (4%). Big automobile companies like Ford and GM made large shortfalls, as many of them rely on Chinese raw materials and cheap labor.