Magnificent 7 meltdown: US tech stocks crash amid tariff shock, Apple tumbles 9%

Apple shares led the losses in the Mag 7, crashing over nine percent on April 3, 2025.

U.S.-based technology stocks saw a sharp sell-off in trade, eroding over $600 billion in value, as U.S. President Donald Trump's broad-based tariffs caused investors to flee their equity holdings.

Overnight, about $2.5 trillion was wiped out from Wall Street after the S&P 500 declined 4.9 percent and the Nasdaq 100 slumped 5.5 percent on April 3, the biggest drop since 2020 for each.

The market downturn is touted as one of the steepest in recent years, which comes as a result of intensified fears of a looming recession, particularly as global supply chains brace for impact.

Among the worst hit, the new darlings of American investors, the "Magnificent 7" technology stocks bore the brunt of the selling. The so-called "Magnificent 7" stocks (Apple, Microsoft, Google, Amazon, Nvidia, Tesla, and Meta) account for 37 percent of the S&P 500.

Shares of iPhone maker Apple led the losses, crashing over nine percent, losing $301 billion in market capitalization, followed by Nvidia, which shed $210 billion with a 7.8 percent drop. Amazon and Meta each lost over $130 billion in market cap, both falling around 9 percent.

Cumulatively, the Magnificent 7 index saw around $600 billion in wealth wiped off, with the combined market-cap of the seven stocks falling to $8.34 billion, down from $8.94 trillion earlier.

Also Read | MC Explainer: Why Are Stock Markets Crashing? Understanding Trump's Tariff Policy and Impact

Here's a look at the four reasons behind the crash:

1. Investors concerns regarding the firms spiked, as a large portion of their supply chains were from overseas. High tariffs will make their parts and raw materials costlier when imported into America. This additional cost will have to be passed on to consumers or they will need to take a hit on their earnings.
2. Further, almost all the US tech companies operate in global markets with EU being one of their main markets. While services is not part of Trump’s tariff hikes, Europe’s strategy to counter US will be to hit their services business, primarily technology and financial services. For instance, EU is already contemplating a one billion dollar fine on X for spreading disinformation. In a economic war situation, these companies will be at the receiving end of the economic war initiated by Trump.
3. Going ahead, the inflationary pressures created by the tariff hikes might keep interest rates high which is bad for valuation of tech companies.
4. Also, if global trade slows due to higher tariffs, these companies—heavily reliant on international markets—could see their earnings decline. The possibility of US recession will also hit them.