Stock Market Makes Remarkable Recovery After Trump's Tariffs Announcement

The stock market experienced a historic decline after President Trump's tariffs announcement, but subsequently recovered with a 9.5% gain after he announced a 90-day pause on reciprocal tariffs. The S&P 500 has largely returned to its pre-announcement levels, with some blue-chip companies still lagging behind. The recovery has been fueled by a combination of Trump's softening stance and a rebound in confidence among investors.

The stock market experienced a historic decline following President Trump's tariffs announcement, but subsequently recovered with a 9.5% gain after he announced a 90-day pause on reciprocal tariffs. The S&P 500 has largely returned to its pre-announcement levels, with some blue-chip companies still lagging behind. The recovery has been fueled by a combination of Trump's softening stance and a rebound in confidence among investors.

Apple, while reporting revenue and profit above expectations, faces rising costs due to tariffs. CEO Tim Cook stated that tariffs could lead to a cost increase of about $900 million this quarter, impacting the company's vast supply chain. Apple has cut its share buyback program by $10 billion and plans to increase its cash dividend by 4%, bringing it to 26 cents a share. Cook highlighted that the majority of Apple's devices sold in the United States this quarter will not come from China, with most iPhones coming from India and iPads, Macs, and Apple Watches from Vietnam. The company expects single-digit turnover growth for the current fiscal quarter, with a hit to gross margins, forecasted to be between 45.5% and 46.5% [1].

Amazon, on the other hand, reported a 16.9% increase in cloud revenue, but this fell short of expectations. The company's AWS division saw the slowest revenue growth in the last five quarters. While Amazon's overall sales held up, the company expects operating income to be between $13 billion and $17.5 billion, below the average estimate of $17.7 billion. CEO Andy Jassy reassured investors that the company has not seen a significant increase in retail prices yet, despite tariffs. Amazon has encouraged sellers to move inventory to the U.S. before higher tariffs take effect [1].

The recovery in the stock market has been driven by Trump's pause on tariffs, which has provided a temporary respite for companies like Apple and Amazon. However, the long-term impact of the trade war remains uncertain, with both companies facing increased costs and potential disruptions to their supply chains. The S&P 500 has largely rebounded, but some blue-chip companies are still feeling the effects of the tariffs. Investors will continue to watch the situation closely as the 90-day pause comes to an end and the trade war's impact on the economy becomes more apparent.

References:
[1] https://www.firstonline.info/en/Apple-and-Amazon-Face-Trump%27s-Tariffs-After-Positive-Quarter/
[2] https://timesofindia.indiatimes.com/world/us/donald-trump-tariffs-news-live-updates-china-xi-jinping-us-stock-market-canada-india-uk-import-taxes-harvard-university/liveblog/120780085.cms