Breakfast | Tariff risks hit US stocks again: Tesla falls over 7%, NVIDIA drops 6% leading the decline in tech stocks

Market Overview

The risk of a tariff war overwhelms the cooling CPI, leading to a triple whammy for U.S. stocks, bonds, and currencies; the rebound in U.S. stocks was merely a one-day affair on Wednesday!

All three major indices closed lower again, with the S&P hitting a day low during the session, dropping over 6%, close to the 7% first-level circuit breaker point, and narrowing the decline to 3.46% by the end of trading.

Tesla fell over 7%, leading the "Tech Seven Sisters"; Meta Platforms dropped 6.74%, NVIDIA fell 5.91%, Amazon declined 5.24%, Apple was down 4.24%, Alphabet fell 3.71%, and Microsoft dropped 2.34%.

In the chip sector, AMD closed down 8.41%, and TSMC ADR fell 4.8%.

Among Chinese concept stocks, Li Auto rose over 5%, XPeng increased over 3%, while Pinduoduo dropped over 6%.

China's Ministry of Commerce Responds to Whether China Will Negotiate with the U.S. on Tariffs: Open to Talks; Ready for a Fight

• According to CCTV News, the Ministry of Commerce responded to whether China would continue to impose higher tariffs on the U.S.: If the U.S. insists on its course, China will fight back to the end. The spokesperson also stated that in the face of U.S. bullying tariffs, China will unswervingly promote high-level opening up; China’s foreign trade has the confidence and capability to cope with various risks and challenges; it will help foreign trade enterprises expand domestic sales channels.
• A spokesperson for the Ministry of Foreign Affairs in Hong Kong: Those who attempt to wield the tariff stick to force countries around the world to surrender should never expect to receive a call from China.

Trump Speaks Again on Tariffs, U.S. Stocks' Intraday Decline Narrows

On Thursday local time, during a cabinet meeting, Trump stated that he does not rule out the possibility of extending the 90-day tariff suspension and mentioned that he has not seen the market sell-off on Tuesday.

Trump noted that there may be some "transitional issues." Reports indicate that Trump is aware that his tariff policy could lead to an economic recession, but his concerns about an economic downturn prompted him to decide to suspend the imposition of tariffs for 90 days.

Report: EU's Countermeasures Against U.S. Tariffs to Be Delayed for 90 Days

The U.S. and EU have temporarily paused tariff confrontations, entering a 90-day negotiation window. After the U.S. postponed imposing tariffs on EU goods, the EU also announced a 90-day delay on its counter-tariffs. Although the trigger is not yet pulled, European Commission President Ursula von der Leyen stated that the countermeasure plan is ready, and if negotiations yield no results, action will be taken immediately.

U.S. Inflation Cools More Than Expected

The U.S. CPI in March rose 2.4% year-on-year, the lowest level in seven months, slightly below the expected 2.5%, and significantly down from the previous value of 2.8%; month-on-month it was -0.1%, marking the first negative figure since June 2024 and the lowest level since May 2020, with an expectation of a 0.1% increase.

The core CPI in March rose 2.8% year-on-year, marking a second consecutive month of decline, the lowest since March 2021, below the expected 3%, and the previous value of 3.1%; the core CPI month-on-month was 0.1%, the lowest since June 2024, falling short of the market expectation of 0.3%.

Report: After Jensen Huang Attends Mar-a-Lago Dinner, the White House Changes Restrictions on NVIDIA's Export of AI Chip H20 to China

According to Global Times, after NVIDIA promised the Trump administration new investments in U.S. artificial intelligence data centers, the White House changed its plan to restrict NVIDIA's export of H20 to China and suspended further restrictions on the export of this chip

Bank of America: The cost of "Made in America" iPhones has increased by at least 90%, with most components still needing to be sourced globally

Bank of America pointed out that although the U.S. has the labor foundation for the final assembly of iPhones, Apple's close collaboration with hundreds of suppliers means that most components still need to be sourced globally, and fully relocating production lines back to the U.S. would take many years. Even if only the final assembly is moved back, costs would rise by 25% due to high labor costs in the U.S., and if tariffs are added, costs could soar by 91%. Unless tariffs are clearly established for the long term, the likelihood of Apple significantly relocating production lines back is low.

To "avoid" Trump's tariffs, Apple rushes 600 tons of iPhones from India!

Apple has urgently transported approximately 1.5 million iPhones (about 600 tons) to the U.S. via charter flights. If tax avoidance is not timely, the base model iPhone 16 could see a price increase of over 40%, which would have a huge impact on consumers.

Google's strongest AI chip targets NVIDIA B200, performance skyrockets 3600 times

Google has launched the seventh generation TPU Ironwood, designed specifically for inference, with performance soaring 3600 times compared to the first generation, making it competitive with NVIDIA B200. Moreover, Google has also introduced several newly upgraded models, including Veo 2, and even announced the "Google version" of the MCP protocol.

Stockpiling before tariffs take effect, TSMC's March revenue continues to accelerate, with a year-on-year increase of 46.5%

Electronics manufacturers have been stockpiling goods in U.S. warehouses, leading to a surge in demand for AI servers and smartphones. TSMC's revenue growth rate in the first quarter reached its fastest pace since 2022. Some analysts believe that investors will focus on potential downward adjustments to annual sales targets and capital plans, reflecting uncertainty about the global chip demand outlook after the new tariffs are implemented in the U.S. on April 9.

Amazon CEO's annual open letter: The company's self-developed chips will help reduce AI costs, with capital expenditures expected to reach $100 billion this year

The Amazon CEO stated that the company's capital expenditures are expected to reach $100 billion this year, with the vast majority directed towards AI-related projects, emphasizing that the company's self-developed AI chips have a price advantage, and AI costs will continue to decline in the future. Amazon must continue to operate like the world's largest startup. Due to the impact of Trump's new tariff policy, sellers have limited profit margins, and cost pressures may ultimately be passed on to consumers. Some consumers have begun stockpiling, but it is uncertain whether this trend will continue.

U.S. House of Representatives narrowly passes budget framework

Trump's tax cuts and debt ceiling increase plan has entered the "fast track" for congressional approval, with some policy proposals expected to be introduced, including tax cuts of up to $5.3 trillion over the next decade and an increase in the debt ceiling by $5 trillion in exchange for a $40 billion reduction in government spending