On April 2, 2025, the stock market displayed a mixed response as President Trump's "Liberation Day" tariffs were announced, leading to fluctuations in major technology stocks. Despite initial concerns about the impact of these tariffs, the Nasdaq exchange managed to close up 151 points, or 0.87%, ending the day on a positive note.
Among the stocks that rebounded were Nvidia (NVDA), which finished trading up 0.25%, DoorDash (DASH), which closed 3.7% higher, and Palantir Technologies (PLTR), also seeing a rise of 3.7%. Tesla (TSLA), which had faced pressure earlier in the day due to weaker-than-expected first-quarter deliveries, closed 5% higher after a report suggested CEO Elon Musk would soon leave the Department of Government Efficiency (DOGE). However, the White House clarified that Musk had previously indicated he would depart once his work was completed.
Nvidia received a significant boost from an unexpected source when The Information reported that Chinese tech giants ByteDance, Alibaba, and Tencent Holdings had placed orders totaling $16 billion for its H20 accelerators, the most advanced AI server chips still legally exportable to China under U.S. tech restrictions. These orders were made during the first quarter of the year, amid concerns that the U.S. might expand its export bans on these chips.
Meanwhile, DoorDash announced a new partnership with Domino's (NYSE:DPZ), allowing U.S. platform users to order pizza through its services starting in May 2025, with Canadian users able to access the service later in the year. This partnership marks a significant shift, as Domino's had previously collaborated with Uber Eats, which accounted for 3% of its $19.1 billion sales in 2024, roughly translating to $575 million. Domino’s COO John Jordan noted that delivery aggregators like DoorDash could potentially generate as much as $1 billion in annual sales.
Palantir Technologies, on the other hand, is in the spotlight for its potential to secure a U.S. Army contract worth $100 million in annual recurring revenue. Analyst Louis DiPalma indicated that Palantir would partner with L3Harris Technologies and Anduril for the Next-Generation Command and Control (NGC2) program. This comes at a time when Palantir has been working to expand its presence in the U.S. commercial market, which is perceived as more sustainable amid concerns over potential defense spending cuts.
However, the overall sentiment in the market remains cautious due to the looming tariff announcements. President Trump’s tariffs are expected to be particularly high on imports from China, Taiwan, and Europe, with a baseline tariff of 10% imposed on goods from most countries. The European Union faces a 20% tariff, while India has a 26% duty on its products sent to the U.S.
As a result of these tariff announcements, stocks of leading technology companies such as Apple (AAPL), Nvidia, and Amazon (AMZN) experienced declines of approximately 5% each. Apple, which heavily relies on Chinese manufacturing for its iPhones and other electronics, saw its stock drop 7% in after-hours trading following the tariffs on Chinese goods.
Despite the immediate negative impact on these tech giants, analysts remain cautiously optimistic about the long-term outlook for Apple. The stock holds a consensus Moderate Buy rating among 32 Wall Street analysts, with an average price target of $249.88, suggesting an 11.61% upside from current levels.
In summary, the stock market's response to President Trump's tariff announcements has been mixed, with some companies managing to close higher despite the uncertainty. Nvidia and DoorDash have shown resilience amid the chaos, while Palantir's potential Army contract could signal promising developments in defense contracts. However, the broader implications of the tariffs on tech stocks remain a concern for investors.
