What Happened?

Shares of iPhone and iPad maker Apple (NASDAQ:AAPL) jumped 9% in the afternoon session after markets rallied sharply on news that President Trump announced a 90-day tariff pause. Reciprocal tariffs were also dropped to 10% for most countries, sparking renewed optimism amid ongoing trade talks. The major stock indices rose as investors, growing impatient of seemingly irrational tariff actions, welcomed the pause as a sign of a more measured path forward.

However, Trump was quick to note that China was not part of the pause. Instead, he prepared to raise tariffs on Chinese goods to 125% after China announced retaliatory tariffs on US imports. This tough stance on China stood in sharp contrast to the softer tone toward others. In a week marked by growing uncertainty, this news eased some of the pressure. The questions remain whether we are out of the woods and can sustain the rally or not.

The shares closed the day at $198.90, up 15.1% from previous close.

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What The Market Is Telling Us

Apple’s shares are very volatile and have had 27 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 5.9% on the news that China imposed a 34% tariff on all U.S. imports amid escalating trade war tensions. This was partly in response to the "reciprocal tariffs" announced by the Trump administration the previous day, with levies on Chinese goods estimated to be as high as 50%. The company was already contending with slowing demand due to delayed features and heightened competition, which dampened sales in the region.

With China contributing approximately 17% of Apple's total revenue in 2024, the newly imposed tariffs not only threatened to inflate product prices and suppress consumer demand further but also highlighted the company's heavy reliance on a market that is becoming increasingly uncertain. For investors, this raises alarms about Apple's near-term growth prospects and its resilience to geopolitical shocks.

Apple is down 18.8% since the beginning of the year, and at $197.92 per share, it is trading 23.6% below its 52-week high of $259.02 from December 2024. Investors who bought $1,000 worth of Apple’s shares 5 years ago would now be looking at an investment worth $2,954.

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