This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:
It pays to be big.
That’s one early takeaway from the tariff drama. Investors momentarily poured back into Big Tech after the administration initiated a temporary levy exemption that covers consumer electronics, networking equipment, GPUs, and servers.
It’s essentially another way of saying that Big Tech will probably be OK, as investors also look to the sector as a defensive play. Meanwhile, other sectors and companies still stare down a massive tariff upheaval.
It’s a feature of American politics to want to avoid the appearance of picking winners and losers in the market. That phrase is often used as a rhetorical cudgel to attack opponents as bad for the economy.
But one person’s favoritism is another’s industrial policy.
If the market is consumed by the repercussions of tariffs, exemptions to those taxes can mean everything. The potential special carve-outs for tech, however, initially sparked a rally on Monday, fizzled, then rebounded. Part of this confused response from investors was the White House seemingly sending mixed signals.
After the exclusions from reciprocal tariffs were first unveiled, the president said in a social media post “there was no Tariff ‘exception’ announced.” He later told reporters that his goal was encouraging production to move to the US but added that the administration has to show flexibility.
The tech titans hoping to receive assistance from the White House are showing flexibility too, or rather a willingness to support the president’s agenda of bolstering domestic manufacturing and investment.
Nvidia (NVDA) on Monday said it will produce up to $500 billion of AI infrastructure in the US within the next four years. That announcement follows other Big Tech commitments from Apple (AAPL), Microsoft (MSFT), and Meta (META) to spend in the US.
Recent trading sessions with wild upward swings have made one thing clear: Pronouncements on tariffs are the only meaningful catalyst for stocks in this uncertain moment.
That goes for Big Tech too, whose trillion-dollar tickers are buoyed by global supply chains and customer bases all around the world. It’s true that their size and market heft might allow these companies to weather whatever tariff costs come. But people are intimately familiar with how much, say, a phone costs, making a sudden upcharge on a finished product an unsavory consumer experience. It is, perhaps, the modern price of bread.
