Tesla (TSLA) and Amazon (AMZN) led the “Magnificent Seven” Big Tech stock surge in premarket trading Monday after the US and China announced a temporary trade war truce.
Tesla shares surged as much as 7.9%, while Amazon jumped 7.7%.
Meanwhile, Apple (AAPL) climbed 6.1%, Meta (META) spiked 5.6%, and Nvidia (NVDA) gained 4.6%.
Google (GOOG) and Microsoft (MSFT) stocks rose more modestly, gaining 2.7% and 2.3%, respectively, in premarket trading.
The US has agreed to temporarily slash tariffs on Chinese goods, which currently run as high as 145%, to 30%, after two days of high-stakes talks between the countries, Yahoo Finance’s Ben Werschkul reports. China will lower its retaliatory duties on US goods from 125% to 10%. The temporary reduction in rates will run for 90 days.
“This is very bullish news for the tech trade as the supply chain concerns will now be significantly reduced,” Wedbush analyst Dan Ives wrote in a Monday note to investors following the news.
Ives has previously noted that Tesla sources a “considerable amount” of parts and batteries from countries including China.
As far as Amazon goes, Raymond James estimated that some 30% of the total value of goods sold on its website comes from China, and Chinese advertisers accounted for 14% of total spending on Amazon advertising in 2024. Chinese advertisers account for roughly 11% and 6% of total ad spending on Meta and Google, respectively, analysts at the investment firm said.
Meanwhile, some 90% of Apple iPhones are made in China, and China accounted for 17% of Apple’s revenue in 2024.
DA Davidson analyst Gil Luria estimates that Chinese companies represent anywhere between 20% and 40% of Nvidia’s end customers.
The “Magnificent Seven” firms have had a rocky month after Trump’s April 2 “reciprocal tariff” plan was announced, shedding $2 trillion from their cumulative market capitalizations in the immediate aftermath of the news.
Trump in April enacted a 10% tariff on all global imports on April 5. His steep reciprocal tariffs on key US trading partners were initially set to take effect April 9 but were paused for 90 days, with the exception of a 145% duty on Chinese imports.
The Trump administration had issued an exemption from tariffs for electronics, including most of Apple’s products.
At the same time, the US government placed export bans on Nvidia’s H20 chips for China, which has sent the AI chipmaker’s shares tumbling, and has set the stage for tariffing semiconductors.
Ives wrote Monday that “there is more wood to chop around chip restrictions (H20/Nvidia) and other issues in the AI trade that need to be addressed as part of a broader deal with US/China.”
