Since President Donald Trump assumed office in January, technology stocks have fallen more than 7%, and additional tariffs have sparked a trade war and increased Wall Street’s apprehension about taking on new challenges.
TakeAway Points:
- The stock of technology companies has fallen almost 7% since the inauguration of President Donald Trump.
- A trade war has been triggered by new tariffs, which have also made Wall Street more risk averse.
- Nvidia’s stock has dropped more than 17% since Trump took office, and other technology companies that depend on foreign manufacturing and parts have also suffered severe losses.
- On Wednesday, a U.S. congressional committee called on Americans to get rid of wireless routers manufactured in China, including TP-Link models, from their homes, claiming that they pose a security risk and allow China to compromise vital U.S. infrastructure.
Tech stocks are down 7% since Trump’s inauguration
Technology stocks have slumped more than 7% since President Donald Trump took office in January, with new tariffs setting off a trade war and adding fuel to the risk-off sentiment on Wall Street.
Economists warned the tariff spat could spike inflation and send shockwaves worldwide, prompting investors to dump winning stocks and mitigate risk.
The fears have battered technology stocks that led the market in the wake of Trump’s presidential victory. The S&P 500 technology sector Is down 7.5% since Trump’s inauguration.
Tariffs may spike manufacturing costs for leading technology companies such as Apple and Nvidia that assemble and manufacture products outside the U.S.
Declining stock performance
Nvidia, the leading artificial intelligence chipmaker, fell nearly 9% on Monday in response to the tariffs and has plummeted about 16% since Trump took office. Shares added about 1.7% Tuesday.
The company makes most of its chips in Taiwan but manufactures some more complex systems in other regions. Nvidia said it plans to produce some chips at Taiwan Semiconductor Manufacturing’s planned facilities in the U.S. Trump announced Monday that the company will be investing an additional $100 billion toward building five new fabrication facilities in Arizona, bringing TSMC’s total investment in the U.S. to $165 billion.
Semiconductor stocks have also underperformed, with the VanEck Semiconductor ETF down nearly 13% since the inauguration. Advanced Micro Devices has shed 17%, while Broadcom and Marvell Technology have tanked more than 21% and 29%, respectively.
Elon Musk-backed Tesla has lost more than third of its value since the inauguration. Alphabet has dropped about 13%, while Microsoft and Amazon are down at least 9% each. Apple is up nearly 3%.
Trump smashed hopes of a potential last-minute deal Monday, clearing the way for 25% duties on Canada and Mexico to go into effect. He said there was “no room left” to discuss alternatives after weeks of negotiations. He also put an additional 10% tariff on Chinese goods.
All three countries responded to the new levies. Canada said it would implement retaliatory tariffs as soon as Tuesday, and Mexico said it is preparing to announce a plan Sunday. China has punched back with a tariff of up to 15% on some U.S. goods.
US congressional panel urges Americans to ditch China-made routers
A U.S. congressional committee on Wednesday urged Americans to remove Chinese-made wireless routers from their homes, including those made by TP-Link, calling them a security threat that opened the door for China to hack U.S. critical infrastructure.
The House of Representatives Select Committee on China has pushed the Commerce Department to investigate China’s TP-Link Technology Co, which according to research firm IDC is the top seller of WiFi routers internationally by unit volume.
U.S. authorities are considering a ban on the sale of the company’s routers, according to media reports.
Rob Joyce, former director of cybersecurity at the National Security Agency, told Wednesday’s committee hearing that TP-Link devices exposed individuals to cyber intrusion that hackers could use to gain leverage to attack critical infrastructure.
“We need to all take action and replace those devices so they don’t become the tools that are used in the attacks on the U.S.,” Joyce said, adding that he understood the Commerce Department was considering a ban.
TP-Link said in a statement to Reuters that the hearing did not provide a “shred of evidence” the company was linked to China’s government. “No government has access to or control over the design and production of our routers,” it said.
“Any claims suggesting our products pose a unique risk to U.S. national security are baseless and without merit,” said Jeff Barney, president of TP-Link Systems Inc.
The company said it had split with its former China affiliate and now manufactures its routers in Vietnam.
Democratic Representative Raja Krishnamoorthi, holding up a consumer-grade TP-Link router, said at the hearing: “Don’t use this.
“I don’t have one at home either. It’s not a good idea,” Krishnamoorthi said.
Joyce said Chinese government-linked hackers were “approaching a peer status” with U.S. cyber capabilities, and said he had grave concerns that the Trump administration’s efforts to cut the federal workforce could undermine U.S. cyber defenses.
Democratic Representative Shontel Brown said the Trump administration had laid off more than 130 officials from the Cybersecurity and Infrastructure Security Agency.
In 2023, CISA said TP-Link routers had a vulnerability that could be exploited to execute remote code.
Krishnamoorthi said the U.S. must deter Chinese hackers by going on offense.
“I think that we should also consider potentially enlisting private sector actors to hack back at the hackers. I’m going to get in a lot of trouble for saying that, but I think you have to sometimes use fire against fire,” Krishnamoorthi said.
