Why are Nvidia and other tech stocks rebounding after Trump’s global tariff plan?

After a bruising week that saw $1.8 trillion wiped off the combined value of the “Magnificent Seven” tech giants, markets staged a dramatic turnaround on Tuesday, led by a strong recovery in shares of Nvidia Corporation. The semiconductor and AI powerhouse saw its stock surge by as much as 7% in early trading, ultimately settling around a more moderate gain of 3.5% by midday. Nvidia’s performance catalyzed a broader rebound across Big Tech, signaling a tentative easing of investor anxiety following the shockwaves from the Trump administration‘s newly unveiled global tariff agenda.

The Nasdaq-100 Index, heavily weighted with technology stocks, saw substantial gains, bolstered by similar upward momentum in Meta Platforms Inc., Tesla Inc., Amazon.com Inc., Apple Inc., Microsoft Corporation, and Alphabet Inc., collectively known as the Magnificent Seven. Meta rose nearly 6%, Tesla and Amazon added over 5% each, Microsoft climbed almost 4%, and both Google parent Alphabet and Apple posted gains of over 2%. The rally followed a volatile session on Monday, where many of these names staged late-day recoveries after initially plunging sharply.

The sudden shift in sentiment came after markets began to digest the full scope and potential exemptions within President Donald Trump’s tariff initiative, announced on April 2. The policy, which imposed a blanket 10% tariff on all global imports over the weekend and introduced “reciprocal” tariffs set to take effect on Wednesday, had initially triggered widespread panic across equities, particularly among technology companies that rely heavily on global supply chains for both manufacturing and sales.

How are Trump’s tariffs affecting major tech companies?

The Trump administration’s tariff plan, which marks a sharp escalation in global trade protectionism, was unveiled as part of what the White House called a two-step effort to reassert American economic sovereignty. The first step includes an immediate 10% tariff on all goods entering the United States from abroad, regardless of origin. The second phase involves reciprocal tariffs that match the rates imposed by foreign governments on U.S. exports.

For Big Tech firms, the implications are especially stark. Many of the sector’s flagship products, such as Apple’s iPhones, Nvidia’s AI servers, and Tesla’s electric vehicle components, are either manufactured or assembled abroad. Apple, for example, produces nearly 90% of its iPhones in China. Tesla sources a significant share of its auto parts from international suppliers. Nvidia, meanwhile, imports products from manufacturing partners in Mexico and Taiwan.

The global nature of these companies’ supply chains leaves them particularly vulnerable to blanket tariff policies. Moreover, a substantial portion of revenue—up to 50% for some firms within the Magnificent Seven—comes from international markets, making them susceptible not only to higher input costs but also to retaliatory trade actions from other countries.

Why did Nvidia outperform its peers in the tech rebound?

While the entire Magnificent Seven group benefited from the easing of market panic, Nvidia stood out for several reasons. First, Nvidia had already posted a notable 3.5% gain on Monday despite a turbulent session that saw the stock initially fall as much as 8% before rebounding. That resilience, combined with fresh optimism around the scope of exemptions in the tariff policy, helped power further gains on Tuesday.

According to Bernstein analyst Stacy Rasgon, one key reason Nvidia was spared the full brunt of the tariff blow was due to a carve-out under the United States-Mexico-Canada Agreement (USMCA), which shields its AI server imports from Mexico. This exemption is critical, as demand for Nvidia’s AI-optimized hardware has exploded in recent years, particularly as hyperscalers and enterprise customers expand their artificial intelligence workloads. With much of that hardware still originating from Mexican facilities, the exemption provides Nvidia a competitive edge amid rising input costs across the industry.

Nvidia has also benefited from its strategic focus on AI and data center growth, which have provided a buffer against the more hardware-dependent and consumer-facing challenges faced by companies like Apple or Tesla. While some of Nvidia’s chips are exposed to trade frictions, its premium positioning and diversified supplier network have helped insulate it from the worst-case scenarios.

Are trade talks helping ease market concerns?

Investor sentiment also improved after reports emerged that the United States was actively engaging in bilateral trade discussions with Japan. Although details remain sparse, the talks fueled speculation that the White House might be open to country-specific exemptions or bilateral deals that could mitigate the broad impact of the tariffs.

Such developments would mark a return to a more transactional trade strategy reminiscent of President Trump’s first term, when deals with countries like Japan and South Korea helped reduce tension after the 2018–2019 tariff wars with China. While the current policy is more sweeping in its scope, analysts believe ongoing diplomacy could soften its impact if major trading partners are willing to negotiate tariff rollbacks or product-specific carve-outs.

The broader U.S. stock market reflected this renewed optimism. The Dow Jones Industrial Average rallied by over 1,300 points, or 3.3%, the S&P 500 rose 3.4%, and the Nasdaq Composite climbed 3.9% on Tuesday. Futures tied to the S&P 500 and Nasdaq also moved higher during pre-market trading, signaling growing confidence that a worst-case trade scenario might be avoided.

What does the Magnificent Seven rebound mean for investors?

The sharp recovery among the Magnificent Seven tech stocks, while a relief to investors, underscores the volatility of a market increasingly sensitive to political developments and global trade policy. The group’s collective loss of $1.8 trillion in market value last week serves as a stark reminder of the risks posed by sweeping economic policies that disrupt supply chains and fuel uncertainty in global capital markets.

However, the rapid reversal also highlights the enduring strength and investor confidence in these companies’ long-term growth prospects. Despite trade tensions, firms like Nvidia, Amazon, and Meta continue to benefit from structural tailwinds in AI, cloud computing, e-commerce, and digital advertising. Their ability to navigate global disruptions, adjust supply chains, and leverage policy exemptions will be critical to maintaining market leadership.

Analysts caution that while the rebound may continue if trade fears subside, much will depend on how tariffs evolve in the weeks ahead. A hardline stance from the White House could reignite volatility, especially if reciprocal tariffs from foreign governments begin to erode export competitiveness or profit margins.

In the near term, investors are likely to remain focused on both company-specific fundamentals and macro-level developments. Key questions include whether other sectors will benefit from similar relief, how companies plan to adjust their sourcing strategies, and whether supply chain resilience becomes a renewed focus in boardrooms.

The Magnificent Seven’s recovery may not yet be a full reversal of last week’s losses, but it signals that investors are willing to look past the immediate shock and bet on long-term innovation, scale, and adaptability. Nvidia’s leadership in this rebound reflects not just market timing but also strategic execution in navigating geopolitical risk.

As the tariff landscape continues to shift, tech stocks are once again proving that volatility is part of the price of innovation—but so is resilience.