TheDrop Market Analysis, 05/23/25

Markets sank by significant margins after President Trump threatened high tariff rates on the European Union and Apple products from overseas.

President Trump.

The S&P 500 index fell 0.7%, the Dow fell 0.6%, the Nasdaq fell 1%, and the Russell 2000 fell by a meager 0.3%. The value of gold strengthened, while the value of the U.S. Dollar against the Euro weakened.

Stocks generally retreated today due to President Trump's waging of trade wars between some of America's closest trading partners, most particularly the European Union. Citing steep tariffs on American-made goods to Europe, Trump threatened a 50% increase on American tariffs on the EU if the EU did not commit to trade negotiations and lower their American tariff. However, although this was used as a bargaining chip for diplomacy, it also had an economic impact as well; companies like Boeing, Harley-Davidson, and Levi Strauss & Co. have braced for the onslaught of American tariffs by considering mass layoffs, and their stocks having decreased as investors anticipated worse financial implications for said companies.

Even worse, the president levied a tariff not on a foreign country, but rather Apple, an American company; although it is based in the Bay Area, majority of its manufacturing originates from China and India, meaning that less jobs are available for Americans in the eyes of Trump. So, to facilitate a huge investment by Apple on American factory complexes like Tesla and others, he levied a massive tariff on all Apple products produced overseas. This is expected to surge the price of most if not all Apple products, as Apple still has not developed a great enough domestic production base.

As expected, Apple stock fell 3%, however other members of the Mag. 7 performed poorly as well, like Nvidia and Microsoft. This could be because investors are fearing that these tariffs could expand to other companies that manufacture overseas, especially Big Tech.

However, stocks that would benefit from high tariffs like U.S. Steel and Palantir saw significant boosts in share price as they favor protectionism.