Apple stock soared almost 6% at market open today, following the announcement of an easement of US tariffs on China.The countries agreed over the weekend to cut reciprocal tariffs from 125% to 10%.However, the deal is set to expire in 90 days as talks over a longer-term resolution continue.
Naturally, investors in Apple are reacting positively to the news.Tariffs on Chinese production hurt Apple’s bottom line, as they directly affect the cost of making the iPhone, which accounts for more than half of the company’s revenue.On its last quarterly earnings call, Apple CEO Tim Cook estimated that the tariff policy at the time would incur costs on the company of about $900 million in the June quarter, and declined to speculate any further into the future.
Presumably, those costs will go down as long as this new US-China deal holds.Investors will be hoping it becomes permanent, especially in the run up to the iPhone 17 launch in the fall.Wall Street Journal reporting this morning suggested Apple was weighing price rises across the iPhone 17 lineup, in part to offset the tariff impacts.
Apple stock closed on Friday, at $198.53.On market open today, it jumped to over $211 and has settled around $207, up about 5%.Apple’s valuation is naturally more closely tied to tariff policy than its other big tech rivals, which are more reliant on software and services.
Apple is currently the second largest public company in the world by market cap, sitting at $3.1 trillion.Microsoft currently holds the crown as the most valuable company, worth about $3.3 trillion today.Of course, everything to do with trade at the moment is volatile and predicting the future is hard, but investors are betting on a favorable resolution sooner rather than later.
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