Major tech stocks, including Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), NVIDIA (NVDA), Microsoft (MSFT), and Meta (META), experienced a significant downturn on Wednesday as investors reacted to concerning economic data.
The U.S. economy unexpectedly contracted in the first quarter of 2025, with GDP declining by 0.3%, driven by increased imports and slower consumer spending. This contraction has reignited fears of a potential recession, leading to a broad selloff in the tech sector.
The Dow Jones Industrial Average plummeted over 400 points, while the Nasdaq Composite fell by more than 2.5%, reflecting widespread investor anxiety. The S&P 500 also declined, marking a sharp reversal from recent gains.
This downturn is attributed to rising imports ahead of broad tariffs introduced by President Donald Trump, which have led businesses to stockpile goods in anticipation of potential trade disruptions.
Alphabet, the parent company of Google, has faced challenges this year, with its stock retreating about 14% due to mixed technical ratings and waning institutional ownership. Despite strong earnings reports from some tech giants, the sector as a whole is grappling with the impact of tariffs and economic uncertainty.
Amazon, set to release its earnings on May 1, is expected to report significant revenue growth driven by AWS, but faces headwinds from foreign currency translation and potential economic slowdowns.
Apple, meanwhile, is dealing with shifting trade policies and economic uncertainty, which have prompted some analysts to trim their price targets. NVIDIA’s stock has been particularly hard hit, dropping about 20% in 2025 due to U.S. government restrictions on AI chip sales to China and increased competition from Chinese companies.
Microsoft and Meta are also navigating these challenging conditions, with investors closely watching their upcoming earnings reports for signs of resilience or vulnerability.
As the U.S. economy navigates these uncertain times, tech stocks are likely to remain volatile. Investors are seeking clarity on how these companies will adapt to potential economic downturns and trade tensions.
The coming weeks will be crucial, with several major tech earnings reports on the horizon, offering insights into the sector’s ability to weather broader economic challenges.