Apollo warns: Tariff storm sweeps the globe, the international influence of the seven giants of the US stock market becomes a double-edged sword
Apollo Global Management warned that the seven giants of the U.S. stock market are affected by the global economic slowdown and international trade tensions, with nearly 50% of their earnings coming from overseas, significantly higher than the 41% of the S&P 500 index. This makes the seven giants more vulnerable in a trade war, especially if Europe implements a digital services tax. The stock prices of the seven giants have plummeted, with Tesla down over 40%, and significant declines in NVIDIA, Apple, Microsoft, and others
According to Zhitong Finance APP, the seven giants of the US stock market are being affected by the global economic slowdown and escalating international trade tensions. Nearly 50% of these companies' earnings come from overseas, a proportion significantly higher than the 41% for S&P 500 constituent companies. Apollo Global Management stated that this international influence makes the seven giants more vulnerable to shocks as global markets face challenges.
In many countries outside the United States, trade accounts for a large share of GDP, which means that the ongoing trade war is expected to have a more severe impact on foreign economies. Companies with substantial international revenue sources (such as the seven giants) will be more severely affected.
Proportion of overseas revenue for the seven giants
Torsten Sløk, Chief Economist at Apollo Global Management, stated: "Therefore, compared to other S&P 500 constituent companies, the global earnings of the seven giants will be hit harder. If Europe retaliates in the form of a digital services tax, the profits of these giants could be negatively impacted even more."
Additionally, potential tariff increases or new digital services taxes could further suppress these companies' global profits.
Since the beginning of this year, the stock prices of the seven giants have significantly declined, with Tesla (TSLA.US) down over 40%, NVIDIA (NVDA.US) and Apple (AAPL.US) down 27%, Microsoft (MSFT.US) down 15%, Meta Platforms (META.US) down 12%, Amazon (AMZN.US) down 20%, and Alphabet (GOOGL.US) down 22%