Tech giants dragged down the US stock market in the first quarter

Even before the massive stock sales that took place on world stock exchanges last Thursday, following US President Donald Trump's "Liberation Day", 2025 was not a good year for US tech giants and their shareholders.

Recall that on "Liberation Day", April 2, the leader in the White House decided to impose customs duties of 20% on products imported from the European Union, 34% on those from China, 31% on those from Switzerland, 26% on India, 10% on the UK, 10% on Brazil. At the same time, Trump imposed customs duties of 46% on products imported from Vietnam, 49% on those from Cambodia, 37% on those from Bangladesh and 32% on those from Indonesia. The White House leader said any product entering the US would be taxed at least 10%. The measures announced by Trump have caused the so-called "Magnificent Seven" - the tech giants - to lose a trillion dollars in stock market capitalization this month. A Statista analysis shows that in the first quarter of 2025, tech giants Nvidia and Apple, which were the most valuable companies in the world for much of the past 12 months, became the biggest negative contributors to the poor performance of the S&P 500 stock index, dragging it down by 1.42 percentage points and 1.06 percentage points, respectively. That means the two companies accounted for more than half of the index's -4.27% negative return in the first quarter of the year, with other "Magnificent 7" stocks such as Tesla, Microsoft, Amazon and Alphabet dragging the index down even further, according to the source cited.

Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, says the IT and communications sectors, which are mostly technology companies, were responsible for 93.3% and 14.4%, respectively, of the S&P 500's -4.3% total return in the first quarter of 2025. Excluding companies in these two sectors, the index's return would have been positive, at 0.6%. Excluding the "Magnificent 7" would also have been enough to turn things around for the S&P 500, which, in the first quarter, would have delivered a 0.5% return without the world's largest and most well-known technology companies.

• Washington Post: Elon Musk urged Trump to roll back tariffs imposed on April 2

Tesla CEO and US administration adviser Elon Musk tried to persuade President Donald Trump to drop his tariffs on imports, but ultimately failed to sway him, two sources told the Washington Post, cited by Reuters and dpa, Agerpres notes.

Musk personally urged the president to drop the move, which has rattled markets and drawn criticism from business leaders. In return, Trump has upped the ante and threatened to impose an additional 50% tariff on Chinese imports, on top of the 34% he announced last week.

White House spokeswoman Karoline Leavitt said in a statement quoted by the Washington Post that Trump "has assembled a remarkable team of talented and experienced people who come up with different ideas, knowing that President Trump is the one who makes the decision. When he makes a decision, everyone is rowing in the same direction to execute it."

Elon Musk called for "zero tariffs" between the United States and Europe in a virtual speech over the weekend at the congress of Italy's far-right ruling League party in Florence. Musk criticized the X network and Trump's economic adviser, Peter Navarro, posting a video of former conservative economist Milton Friedman praising free trade, while his brother Kimbal denounced the new tariffs on the same network, calling them a "permanent tax" on American consumers.

Although Tesla has less exposure to global supply chains than traditional automakers, analysts note that a reduction in consumption caused by the imposed tariffs could hurt demand for its vehicles.

South African-born billionaire Musk heads the new Department of Government Efficiency (DOGE), designed to restructure the state apparatus.