Tech Stocks Surge 2.3% as Trump Exempts Electronics from Tariffs

U.S. stocks opened higher on Monday, with tech stocks leading the gains following the latest tariff news. Apple, Nvidia, and Dell were among the top performers, rising in early trading. The surge came after the Trump administration announced the exclusion of consumer electronics, including smartphones and computers, from the recently imposed tariffs. This move provided a significant boost to tech stocks, with the S&P 500 opening with a 1.7% gain and the Nasdaq edging up 2.3%. The Dow Jones Industrial Average also opened higher, rising more than 460 points.

Apple's stock experienced a notable increase, rising more than 4% in morning trades. The temporary tariff exemption on a range of products, including smartphones, laptops, and servers, was seen as a positive development for the tech sector. Other tech stocks, such as Dell Technologies, HP, and Super Micro Computer, also saw gains as a result of the tariff relief. However, it is important to note that electronics products still face a 20% tariff on Chinese goods imposed earlier this year. This partial relief was seen as a positive step by analysts, who noted that it removed a significant risk for companies like Apple.

Despite the upbeat open, investors took note of comments from U.S. Commerce Secretary Howard Lutnick, who stated that while electronics had been removed from the earlier tariff rates, they are still expected to fall under separate duties. This uncertainty has added to the challenges faced by the tech industry, which has been navigating a complex trade environment. The frequent changes to the Trump tariffs have made it difficult for companies to plan and for investors to decide on their stock strategies.

Analysts at Bitfinex suggested that Bitcoin could outpace stocks amid market recovery, mirroring the trajectory of tech stocks. However, the market is aware of Trump’s comments via Truth Social that the exclusion for tech stocks isn’t permanent. Alongside tariff-related developments, attention will also turn to earnings this week. After strong reports from several major banks last week, upcoming results from Goldman Sachs, Bank of America, and Citi will be closely watched.

KeyBanc Capital Markets analyst Brandon Nispel raised his rating on Apple stock to sector weight, or neutral, from underweight, or sell, while keeping his price target at 170. He acknowledged that the tariff exemption took a big risk off the table but cautioned that Apple was not yet out of the woods. Nispel highlighted concerns about high growth expectations for Apple, given a likely pullback in consumer spending, and the company's thus-far failed approach to AI. He also mentioned the potential negative implications from the pending Department of Justice lawsuit against Alphabet's Google.

JPMorgan analyst Samik Chatterjee lowered his price target on Apple stock to 245 from 270 but maintained his overweight, or buy, rating. He described the Trump administration's latest tariff moves as a big relief for Apple but noted that the company still faced potential further downside risk on the resumption of tariffs. Chatterjee also pointed out that not all Apple products were exempt from the stepped-up tariffs, with iPhones, Macs, and iPads being exempt while AirPods and Apple Watch were not. Needham analyst Laura Martin estimated that more than 80% of Apple's products are manufactured in China and expected the company to continue diversifying its manufacturing out of China over the next 3-5 years to lower its dependence on the region. She highlighted the risks associated with Apple's core business being heavily reliant on a single economy.