Apple May Hike iPhone Prices 43% Amid Tariffs

Apple may need to raise iPhone prices by 43% to offset new US import tariffs ranging from 24% to 54%, threatening its profit margins and high stock valuation. The Nikkei plunged 3% on the day and 9.6% for the week, while Wall Street and European futures slipped as investors fled US assets over unpredictable trade policies. The dollar is down sharply this week, with losses of 2.7% against the yen and 3.0% against the Swiss franc.

Equities

The FTSE 100 fell 1.6% on Thursday to a two-month low, as worries grew that new tariffs announced by President Trump would harm global economic growth.

The FTSE 250 dropped 2.2%, marking a one-year low. Personal goods stocks were among the hardest hit. Burberry shares fell 10% and Watches of Switzerland dropped 13.5%, reflecting concern that higher US import duties on goods from the EU and Switzerland could hit luxury demand.

UK bank shares also declined, with HSBC down 8.9% and Barclays falling 8.7%, in line with pressure on the European banking sector. Sterling strengthened to a six-month high against the dollar, weighing further on the FTSE 100’s export-heavy composition.

Industrial miners also moved sharply lower, with the sector down 5.3% after copper prices fell on fears of reduced global demand. Utilities rose 4.2% as investors looked for more stable income, and pharmaceutical shares gained 1.6% after medicines were temporarily excluded from the new tariffs. Currys rose 14.9% after raising its full-year profit forecast, lifting sentiment in a struggling retail sector.

In the US, the S&P 500 fell 4.85% to 5,395.92, posting its largest single-day percentage drop in years. The Nasdaq tumbled 5.99% to 16,547.45, while the Dow Jones dropped 3.98% to close at 40,542.71. The sell-off followed President Trump’s announcement of a 10% tariff on nearly all imports and even higher rates on selected countries.

Apple shares dropped sharply after the company was hit with tariffs totalling 54% on Chinese-manufactured products. Analysts at Rosenblatt estimate Apple may need to raise iPhone prices by over 40% to offset the impact. Nvidia and Amazon also moved lower, along with other large-cap technology stocks. The Russell 2000 index, which includes small-cap companies, fell sharply as concerns grew about domestic supply chains and weakening demand.

Retailers with exposure to Asian supply chains were also under pressure. Nike and Ralph Lauren shares both fell, hit by the prospect of new duties on imports from Vietnam, Indonesia and China. US banks such as Citigroup, Bank of America and JPMorgan declined as recession fears grew. Oil majors ExxonMobil and Chevron dropped after crude prices slumped 6.8% on concerns over falling demand and signals that OPEC+ would accelerate production increases.

Forex & Commodities

The US dollar fell sharply on Thursday, hitting six-month lows against the euro, yen and Swiss franc after President Trump’s sweeping new tariffs raised concerns about slowing growth and higher inflation. The euro climbed 1.74% to $1.1037, recording its biggest single-day gain since November 2022. The dollar dropped 1.95% against the yen to 146.45 and fell 2.35% against the Swiss franc to 0.8608. Sterling rose 0.66% to $1.3093, its highest level since October, supported by expectations that the UK could avoid the harshest of the US tariffs. The Mexican peso and Canadian dollar both strengthened by over 1% against the greenback, reflecting relief that they would not face additional levies under the latest trade measures.

Gold prices slipped 0.3% to $3,103 an ounce on Friday morning, after reaching a record high of $3,167.57 on Thursday. Despite the pullback, the metal remains on track for a fifth consecutive weekly gain. The retreat came after markets started to price in the economic risks of the new tariffs more clearly. US gold futures edged higher by 0.1% to $3,123.40. Silver fell 1% to $31.54, platinum eased 0.2% to $950.85, and palladium rose 0.4% to $932.00.

Oil prices continued to fall, with Brent crude down 1.1% to $69.38 a barrel and WTI off 0.5% to $66.13. Both benchmarks are heading for their worst week in months, pressured by concern that slower economic growth could hit global oil demand. OPEC+ plans to increase supply more aggressively in May, returning 411,000 barrels per day to the market. The Brent-Dubai spread remains wide as a result.