Liberation Day Selloff: Apple, Nike Stocks Plunge Premarket; Citi Warns on Chip Stock Risk

President Trump's "Liberation Day" tariff declaration has sent shockwaves through global financial markets, introducing a baseline 10% duty on all U.S. imports alongside country-specific reciprocal tariffs. Severe impacts fall on major trading partners like China, which is facing a combined tariff rate of 54%, while the European Union will encounter a 20% rate, and India faces duties of 26-27%. Stock markets worldwide have reacted with dramatic declines, as S&P 500 (ESM25) and Nasdaq (NQM25) futures plummeted over 3%, with the Dow Jones Industrial Average ($DOWI) projected to drop more than 1,000 points at the open.

Apple, Nike Set to Open Sharply Lower

The announcement has particularly affected the technology and retail sectors, with Apple (AAPL) down 7.47% in pre-market action due to supply chain concerns, while global retailers such as Walmart (WMT) and Nike (NKE) are also set to open sharply lower due to their Asian manufacturing exposure. WMT is off 5% ahead of the bell, while NKE is poised to plummet more than 11%.

One stock rising early is Diageo (DEO), up more than 3%, as European distillers dodged the worst-case tariff scenario.

As markets process these developments, the U.S. dollar ($DXY) has weakened considerably against major currencies, while gold (GCJ25) has reached a historic peak of $3,168 per ounce as investors seek safe-haven assets. Overseas, Asian markets have borne the brunt of the impact, with Japan's Nikkei falling nearly 3% and other regional indices experiencing similar declines.

Citi Says Chip Stocks Are at Risk

In a note this morning, Citi analyst Christopher Danely highlighted the risks for semiconductor stocks, and called out Micron Technology (MU), Broadcom (AVGO), Global Foundries (GFS), and ON Semiconductor (ON) as particularly vulnerable.

“We believe the companies most at risk are low-margins stocks such as ON, Micron and GlobalFoundries given more margin volatility and high-multiple stocks such as Broadcom as multiples compress,” explained the analyst.

While cautioning that the duties are “convoluted and virtually impossible to assess completely given the length and geographic diversity of the semi supply chain,” Danelys warned of up to 20% downside in chip stocks given a prolonged trade war: “If the tariffs continue for another month, we believe it is highly likely the supply chain will 'freeze up' given uncertainty, drastically lower order rates/inventory, and result in lower guidance across the board – similar to COVID.”

What’s the Long-Term Impact of Trump’s Trade War?

The comprehensive nature of these tariffs, representing the highest U.S. tariff levels in over 100 years, has prompted economists to warn of increased recession risks and potential stagflation. Major trading partners, including China and the European Union, have already threatened retaliatory measures, raising concerns about a potential full-scale trade war. 

Additionally, financial experts suggest these developments could delay anticipated Federal Reserve rate cuts while simultaneously pushing U.S. inflation higher. The broad scope of these measures, which many economists have noted lack a clear economic rationale, threatens to permanently alter global trade flows and significantly disrupt international supply chains.