Wall Street’s “Magnificent 7” stocks added more than $1.5 trillion in market capitalization yesterday, after President Donald Trump put a pause on reciprocal tariffs for 90 days. Electric vehicle (EV) maker Tesla (TSLA) led the gains with a 22.7% surge, while chipmaker Nvidia (NVDA) jumped 18.7%. Surprisingly, iPhone-maker Apple (AAPL) rallied 15.3% even though Trump did not pause the 125% tariffs on Chinese imports. Following the announcement, Treasury Secretary Scott Bessent said, “Do not retaliate, and you will be rewarded,” as if signaling China to stop retaliating with countermeasures.
It was a strong day for global stock markets, after days of bleeding trillions of dollars in value. Stocks were already climbing higher during intra-day trading in anticipation of trade negotiations. The White House announced a 90-day pause on all reciprocal tariffs announced on “Liberation Day,” pushing all major indices higher. The S&P 500 index (SPX) gained 9.52%, the Dow Jones Industrial Average (DJIA) notched up 7.87%, and the tech-heavy Nasdaq (NDX) ended up 12.16%.
Tariffs’ Pause Gives a Breather to Rethink Investment Strategy
The break on potential tariff concerns gives a breather to management teams to rethink their investment strategy. Until their Q1 Fiscal 2025 results, major tech companies were beaming with pride over their billion-dollar bets on artificial intelligence (AI) and data center infrastructure. However, Trump’s tariffs prompted them to reconsider their massive investments, since they levied heavy taxes on the hardware coming from Taiwan, South Korea, and China.
Despite the temporary respite, there is still ambiguity on how the final tariffs with different trading nations will take shape, post negotiations with the White House. The earnings season for the second quarter is just around the corner, and investors will closely monitor how big tech companies adjust their investment and capex budgets in response to the taxes. Meanwhile, Google parent Alphabet (GOOGL) was the first big tech company to confirm that it will stick to its planned $75 billion spending for Fiscal 2025.
Is it Time to Buy the Magnificent 7 Stocks?
Despite the surge in the Magnificent 7 stocks yesterday, their valuations are still a far cry from the peaks of 2024. Investors can consider investing in one of them after thorough research.
We used the TipRanks’ Stock Comparison Tool for Magnificent 7 Stocks to see which one is most favored by analysts.
Currently, Nvidia, Microsoft (MSFT), Amazon (AMZN), and Meta Platforms (META) score Wall Street’s “Strong Buy” consensus rating, with NVDA stock offering the highest upside potential among them.
