Big tech firms lose US$3.8 trillion as trade tensions fuel market volatility and regulatory pressure
Canadian investors significantly boosted their exposure to United States equities in February, acquiring US$29.8bn in US shares while selling $2bn in non-US equities, according to Financial Post citing Statistics Canada.
This marked a turnaround from January, when Canadians had sold US equities. The increase came as the S&P 500 reached a record during the month.
This sharp rise in investment occurred alongside growing Canadian public backlash against US President Donald Trump’s trade policies, including calls to boycott US products and travel.
Trump signed an executive order on February 1 imposing 25 percent tariffs on a wide array of Canadian goods and 10 percent on energy.
While he later introduced significant exemptions, tariffs on steel, aluminum, and Canadian-made autos remain, with the potential for more measures.
In February, foreign investors also reduced their holdings in Canadian shares by $6.5bn — the highest monthly divestment from Canada’s equity market since October 2007.
At the same time, non-resident investors increased their exposure to Canadian bonds by $9.9bn and money market instruments by $5.6bn, with acquisitions led by corporate bonds, private corporate paper, and provincial government bonds.
Meanwhile, Big Tech companies in the US began reporting quarterly earnings this week under a cloud of market uncertainty stemming from Trump’s policies.
Since his January 20 inauguration, the combined market value of the “Magnificent Seven” — Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet, and Facebook parent Meta Platforms — dropped by US$3.8tn, or 22 percent, as of April 20, according to The Canadian Press.
The decline intensified after Trump announced reciprocal tariffs on April 2, which would have impacted Big Tech’s global supply chains.
A temporary freeze and exemptions on electronics have provided some relief, but Trump warned the measures could return.
Wedbush Securities analyst Dan Ives stated, “The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors and creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”
Tech CEOs, including Apple’s Tim Cook, Tesla’s Elon Musk, Google’s Sundar Pichai, Facebook’s Mark Zuckerberg, and Amazon’s Jeff Bezos, had initially shown support at Trump’s inauguration, expecting reduced regulation and growth in artificial intelligence and deal-making.
Instead, the administration has pursued regulatory actions, maintaining antitrust lawsuits launched during former US President Joe Biden’s term targeting Apple and Amazon, while also trying to break up Google and prove that Meta runs an illegal monopoly.
Nvidia reported a US$5.5bn charge last week after being barred from selling a key AI chip to China.
Earnings calls began with Tesla, which disclosed a 13 percent drop in first-quarter car sales year-over-year. The decline came amid protests and boycott calls tied to Musk’s role in the White House’s cost-cutting efforts.
Alphabet reports Thursday, followed by Amazon on April 29, Meta and Microsoft on April 30, and Apple on May 1. Nvidia, whose fiscal year ends in January, will release results on May 28.
