Breakfast | Tariffs are about to officially take effect, and U.S. stocks have been hit hard: Apple once plunged 11%, leading the decline among tech giants

Today's Key Focus

The United States' "reciprocal tariffs" will officially take effect on April 9.

Market Overview

Overnight, U.S. stocks surged significantly due to optimistic expectations regarding trade negotiations, but White House officials stated that there would be no tariff exemptions in the near term and confirmed that high tariffs are imminent, leading to a reversal in market sentiment. U.S. stocks once again experienced a "roller coaster" decline, with the market capitalization of the seven major U.S. tech stocks dropping over $5 trillion from their peak.

Specifically, the Dow Jones Industrial Average plummeted more than 2,000 points from its high during the day, ultimately falling 0.8%, about 300 points; the S&P 500 erased over 4% of its gains, closing down 1.6%; the Nasdaq Composite, which had risen over 4% in the morning, ultimately closed down 2.2%.

All seven major tech stocks fell. Tesla, which rose over 7% in the morning, dropped 4.9%, Amazon fell 2.62%, Google A declined 1.4%, NVIDIA, which rose over 8% in the morning, fell 1.37%, Meta Platforms dropped 1.12%, and Microsoft fell 0.68%.

Apple's stock price, after reaching a high in the morning, fell 11% at one point, ultimately closing down 5%, with a market capitalization evaporating by about $1.5 trillion compared to its historical peak in December 2024.

Among chip stocks, AMD fell 6.49%, and TSMC ADR dropped 3.28%.

In terms of Chinese concept stocks, Xiaomi ADR rose nearly 4%, Tencent ADR fell over 2%, and both Alibaba and Pinduoduo dropped over 6%; automotive-related Chinese concept stocks plummeted, with Li Auto down 8%, XPeng down over 7%, and Nio down over 6%; the Chinese concept ETF KWEB fell nearly 4%, CQQQ dropped over 3%, YINN fell 3%, while YANG rose over 4%.

Meanwhile, Trump signed an executive order aimed at boosting coal mining and promoting electricity development. As a result, coal stock Peabody surged nearly 30% in after-hours trading, now up 17%.

U.S. Stocks Experience False Hope Again

Earlier overnight, U.S. Treasury Secretary Mnuchin stated that up to 70 countries are seeking negotiations. According to the Global Times, Mnuchin indicated that discussions are ongoing regarding which regions to prioritize for tariff agreements, and revealed that U.S. President Trump will participate in the negotiations. Hopes for a trade agreement boosted U.S. stocks significantly in early trading on Tuesday.

However, subsequent news sharply deteriorated the recently improved risk appetite. During the midday session, the White House press secretary mentioned that the U.S. would impose high tariffs on other countries this Wednesday, which was later confirmed by the White House to the media; according to CCTV, U.S. Trade Representative Lighthizer stated that Trump has made it clear that there will be no tariff exemptions in the near term; according to Xinhua News Agency, Canada announced that reciprocal tariffs on U.S. automobiles will also take effect on Wednesday.

U.S. Threatens Further 50% Tariffs on China, China's Ministry of Commerce: If the U.S. insists on its way, China will respond resolutely

A spokesperson for the Ministry of Commerce stated that the U.S. threatens to impose further 50% tariffs on China, to which China firmly opposes; if the U.S. escalates tariff measures, China will resolutely take countermeasures to safeguard its rights and interests.

Trump Reconfirms Reciprocal Tariffs Take Effect on April 9

White House press secretary Levitt stated that President Trump met with the trade team on the 8th. Trump instructed them to reach a "tailored" trade agreement. Reciprocal tariffs will continue to take effect. For all countries, no options are off the tableLevitt mentioned that Trump believes the U.S. has the labor conditions for domestic production of iPhones.

Hedge Fund Tycoons Discuss Tariff Formula: Trump's Formula is Wrong by 4 Times, Explaining the Plunge in U.S. Stocks

According to an analysis by the American Enterprise Institute, the U.S. government mistakenly equates trade deficits with "tariff barriers" of other countries. Incorrect price and elasticity data have led to an overestimation of "implicit tariffs" by four times. Some commentators believe this formula may not have been designed for scientific calculation from the beginning, but rather as a strategy of "maximum pressure" on trading partners to create stronger negotiation leverage.

Contradictions Remain, Musk Blasts Navarro: Dumber than a Brick

Vigorously criticizing Navarro, supporting trade on social media, and privately chatting with Trump, Musk does not hide his opposition to Trump's tariffs. The "Musk circle" finds it hard to accept high tariffs. According to insiders, many business and tech leaders who supported Trump's campaign are shocked by the president's decision to impose such high tariffs and are disappointed that they cannot exert more influence on the policy. People in Musk's circle have directly lobbied Vice President Pence, calling for more reasonable free trade policies.

Stabilizing Capital Markets, China's Version of the Stabilization Fund is Here!

• People's Bank of China: Firmly maintain the stable operation of capital markets and provide sufficient re-lending support to China Investment Corporation. The People's Bank of China firmly supports the Central Huijin Investment Company in increasing its holdings of stock market index funds.
• Central Huijin: Firmly maintain the stable operation of capital markets, increase ETF allocation, and balance structural increases. Central Huijin will increase allocation efforts, balance structural increases, and fully leverage the role of patient capital and long-term capital. Central Huijin has full confidence and sufficient capability to firmly maintain the stable operation of capital markets.

Xinhua News Agency stated that Huijin is responsible for investment, and the central bank promises to provide funds, bringing China's version of the stabilization fund to the surface, which helps alleviate market concerns and boost market confidence.

Will the Federal Reserve Step In to Rescue the Market?

Analysts believe that under the uncertainty of tariff policies, the Federal Reserve cannot predict what Trump will do, mirroring the market's predicament: if he maintains tariffs as stated, the economy may quickly shrink, and the S&P 500 index could fall into a bear market; but if tariffs are lifted, the economy may grow again, and the stock market could return to historical highs.

Goldman Sachs pointed out that if credit spreads further widen to 500 basis points, Powell is likely to intervene and change policy stance as he did in 2018. Currently, the high-yield bond spread has reached 454 basis points, just a step away from the dangerous threshold of 500 basis points