Technology shares surrendered early advances on Tuesday as fading hopes for tariff relief triggered a market retreat. The Nasdaq Composite, a benchmark heavily weighted towards tech firms, erased a midday surge of 4.6% to finish 2% lower, extending its recent slump.
Among prominent decliners, Apple and Tesla each shed approximately 5% of their value, while Meta Platforms, Alphabet, Amazon, Microsoft, and Nvidia all closed in negative territory.
This extended the recent turbulence sparked by former President Trump’s proposed tariff expansions, which have contributed to the “Magnificent Seven” tech conglomerates losing nearly $1.8 trillion in combined market capitalisation since last week.
Earlier optimism stemmed from speculation that Washington might broker agreements to reduce import duties with key trading partners. However, concerns mounted throughout the afternoon that reciprocal tariffs scheduled to take effect at midnight would proceed unchanged. The uncertainty fuelled wild price swings, with Monday’s trading volume reaching its highest level in nearly two decades.
Semiconductor manufacturers mirrored the retreat despite escaping recent tariff measures, as the VanEck Semiconductor ETF dropped 2.7% after relinquishing earlier gains. Advanced Micro Devices slid 6%, while Apple supplier Qorvo tumbled roughly 10%. Intel and Micron Technologies registered losses of about 7% and 4% respectively, though Broadcom defied the trend with a 1% gain following its announcement of a $10 billion share repurchase scheme.
The sector’s struggles indicate mounting anxiety that elevated duties could depress demand for consumer electronics and industrial equipment containing chips, potentially hampering economic expansion. This comes alongside warnings from analysts about possible future tariffs targeting semiconductors specifically.
Market participants now await crucial inflation data and corporate earnings reports for clearer direction, with recent labour figures showing resilient employment growth of 228,000 new positions in March against a stable 4.2% unemployment rate.
While Morgan Stanley maintains a cautiously optimistic S&P 500 target of 6,500, representing 15% upside potential, rival forecasts from UBS and RBC Capital range between 6,200 and 6,400, reflecting persistent trade policy risks.
Asian tech firms demonstrate relative resilience, with China’s Suzhou TFC Optical Communication and Xi’an NovaStar Tech reporting year-on-year revenue growth exceeding 30%, offering a counterpoint to the US market’s struggles.