Trump’s Tariff Reversal Triggers $1.5 Trillion Tech Rally — What It Means for AI, Nvidia, and Big Tech’s Next Move

The "Magnificent Seven" technology giants — Nvidia, Apple, Tesla, Microsoft, Alphabet, Meta, and Amazon — staged a dramatic comeback on Wednesday, adding over $1.5 trillion in market value.

The rally came after US President Donald Trump unexpectedly announced a 90-day pause on sweeping tariffs, which had recently rattled global markets and threatened to derail the sector's aggressive AI expansion plans.

The gains helped ease investor fears after the group had lost $3.4 trillion in combined market capitalization since peaking in late 2024. Nearly $2 trillion of that was wiped out just last week following Trump’s move to impose tariffs on a wide range of imports, including critical components from AI chip exporters like China, Taiwan, and South Korea.

Tariff Pause Rekindles AI Capex Optimism
While the losses haven't been fully recouped, investors rushed back into tech stocks, drawn by the renewed clarity on cross-border trade. Nvidia, Meta, and Tesla led the surge, with share prices climbing between 9.68% and 22.69%, fueling a 12% jump in the Nasdaq.


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"The pause hopefully gives CFOs and COOs breathing room to proceed with AI-related expansion plans that may have been on hold due to trade friction, particularly as AI chip imports and specialized hardware – example from Taiwan or South Korea – are exposed to tariff risks," said Michael Ashley Schulman, chief investment officer at Running Point Capital, which holds Mag 7 exposure through funds and family clients.

Schulman emphasized the broader implications for the tech sector’s growth agenda: “Big Tech’s AI ambitions require enormous capex, cross-border talent, and complex hardware dependencies.”

Spending Plans Back in Focus
The pause comes at a critical juncture as Wall Street prepares to dissect the upcoming quarterly earnings of these firms. AI investments, previously threatened by rising trade barriers, are now being reassessed.

Alphabet reaffirmed on Wednesday that it will spend about $75 billion in 2025 on expanding its data center footprint, while Microsoft reiterated its multibillion-dollar investment in infrastructure, saying, “These investments are informed by near-term and long-term demand signals.”
 

Trump’s Trade Strategy Still Unfolding
Despite the temporary relief, volatility could return. In a press briefing Wednesday, Trump announced he would raise tariffs on Chinese imports to 125%, up from the 104% level imposed just a day earlier. However, tariffs on other countries would be lowered, signaling a more targeted approach.

The tariff manoeuvring has cast a shadow over tech-driven economic recovery, especially as companies lean heavily into AI-powered products and services. For now, though, the pause offers breathing room — and for the Magnificent Seven, a much-needed boost.
(With Inputs From Reuters)