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Jim Cramer of CNBC expressed concern regarding the challenging market environment for two of his favored stocks, Nvidia and Apple, amid recent trade tensions driven by the Trump administration’s stringent policies towards China. On a recent broadcast, Cramer highlighted the shift in U.S. trade strategy, stating, “Prior to Trump’s presidency, our approach leaned towards coexistence and commerce with China, despite their trade practices. Now, however, we have adopted an aggressive, scorched-earth strategy without military action.”
The stock market faced significant declines on Monday, with the Dow Jones Industrial Average falling by 2.48%, the S&P 500 decreasing by 2.36%, and the tech-oriented Nasdaq Composite losing 2.55%. This drop can be attributed to ongoing instability in global trade relationships, particularly with China, a key trading partner for the U.S. Currently, there is a staggering 145% tariff on imports from China, met with a 125% tariff from China on American goods. Investor confidence was further shaken following President Trump’s overt criticism of Federal Reserve Chair Jerome Powell.
Previously referred to as the “Magnificent Seven,” leading tech companies like Apple, Nvidia, Tesla, and Meta contributed to the Nasdaq’s downturn. Cramer expressed that there appears to be a governmental bias against both Apple and Nvidia, the latter specializing in semiconductor design, which is experiencing high global demand. He suggested that the Trump administration perceives Nvidia as insufficiently proactive in preventing China from accessing its products, arguing that the White House prioritizes restricting China over enhancing American interests.
As for Apple, Cramer remarked that the company faces even greater difficulties due to its integral role in the U.S.-China trade conflict. Apple relies heavily on Chinese manufacturing and consumers. The Trump administration’s perspective seems to be that Apple should relocate all production to the U.S., which Cramer challenged, asserting that undermining a successful business like Apple is not a sound strategy, especially given its continuous innovation and product appeal.
Investors may hesitate to engage with Nvidia and Apple stocks due to perceived governmental pressures that could lead to reduced financial performance. Nevertheless, Cramer stated that he only slightly reduced his positions in these stocks for the CNBC Investing Club’s Charitable Trust, noting that there exists a possibility that the administration might reconsider some of its harsher policies if economic conditions worsen. He acknowledged the uncertainty surrounding this administration, making it difficult to forecast the trajectories of these companies.
“Nothing is definite under this president. There’s a chance he could recognize that a thriving Apple with operations in China serves our national interests or could decide that a compliant Nvidia is worth encouraging. The situation doesn’t have to remain as it is,” Cramer explained. “However, it is equally possible that he remains steadfast, and the stocks keep suffering—it could go either way.”
The White House has not provided a response to inquiries regarding these issues.
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Disclaimer: The CNBC Investing Club Charitable Trust holds positions in Nvidia, Apple, and Meta.
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