Global tech shares gain on US tariff exemptions, but uncertainty remains

Global technology shares rose on Monday after the U.S. exempted electronics such as smartphones and computer hardware from its reciprocal tariffs on China, but with President Donald Trump promising tariffs on the chips sector as soon as next week, the relief around how companies will manage their supply chains could be interrupted again.

Big Tech shares have slumped in the past two weeks along with the broader market as tit-for-tat tariffs between Washington and Beijing stoked fears of higher component costs, softer consumer demand and the worst supply-chain disruption since the COVID-19 pandemic.

Trump's aggressive tariffs also led investors to rapidly sell the U.S. dollar and Treasury bonds, as investors started to question the safe-haven status of those two assets.

Trump backtracked on his broad tariffs that would have lifted the overall rate U.S. businesses and consumers would have to pay for imports by roughly 25%, economists have estimated.

This weekend's exemptions suggest the White House was becoming more aware of the pain that tariffs had in store for inflation-weary consumers, especially on popular products such as smartphones, laptops and other electronic devices.

The relief may be short-lived, as Trump on Sunday pledged fresh tariffs on imported semiconductors within days, part of his push to shift manufacturing away from China, a major tech market and global production hub.

His words were echoed by other administration officials, including Commerce Secretary Howard Lutnick. The shifting stances on tariffs - proclaiming them as necessary for boosting American manufacturing and critical to the White House's tax plans, only to retreat in the face of opposition - have undermined business and consumer confidence.

Earnings estimates are falling, while consumers' inflation expectations have spiked to levels not seen since Ronald Reagan's administration.

"The back and forth on policy is still likely to exacerbate uncertainty for businesses and consumers," wrote equity strategists at Morgan Stanley on Monday.

Apple shares were up 3.5% after they had declined 9% in the past two weeks. Its flagship product, the iPhone — primarily made in China and imported into the U.S. — was at risk of significant price hikes if substantial tariffs persisted, analysts warned.

"The removal of the worst-case scenario is an element of support (at least temporarily) for the sector," analyst Alberto Gegra of Equita said, adding that it helps to avoid a total block of supplies due to tariffs on China exceeding 100%.

Other consumer-facing companies including computer hardware makers HP and Dell Technologies rose 3.5% and 5.7%, respectively, while chip giant Nvidia was up 1.6%. That company also said it would boost U.S. spending on facilities for AI development.

European chip stocks also advanced, with gains strongest for those most exposed to the U.S. market such as ASM International and Infineon rising between 3% and 4%.

Major Asian suppliers to companies such as Apple advanced. Foxconn, the largest iPhone assembler, rose as much as 7.8% before trimming gains to close 3% higher. Contract laptop maker Quanta closed up 5.8% and Inventec, which makes artificial intelligence servers, rose 4.1%.

The White House unveiled the tariff exemptions on Friday, covering 20 categories, including computers and laptops, as well as semiconductor devices, memory chips and flat panel displays. Analysts broadly said that the exemptions give companies more time to plan for where tariffs settle out.

"Given that the current landscape essentially means that technology devices are taxed at 20% from China (down from 145%) and 0% everywhere else, some device makers could build inventory in the U.S. to take advantage of the temporary phenomenon," said Angelo Zino, senior equity analyst at CFRA Research.

"Ultimately, chips inside these devices will be taxed but we think will be at a considerably lower level than what was previously imposed and should allow device manufacturers and supply chain to better manage the higher expected chip costs."