Tech stocks are down 7% since Trump’s inauguration as trade war fuels uncertainty

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.

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.