Just when you thought that tariff headlines couldn’t move the markets lower, Trump sparks another round of chaotic market fluctuations with threats of 50% tariffs on the European Union. With the potential tariff to be delayed as negotiations go on behind the scenes, it now seems like markets are in a bit of a tough spot as they look to find direction after rallying sharply out of those Liberation Day lows.
Add the threat of potential 25% tariffs on Apple (NASDAQ:AAPL | AAPL Price Prediction) into the equation, even as it moves some of its iPhone production out of China, and it certainly seems like a bad time to think things can’t worsen on the tariff front.
Undoubtedly, even if tariffs don’t stick around for long, there may be no avoiding the supply shocks as firms scramble to move things around to avoid the worst of the levies. Without clarity as to where tariffs will be in the long run, it’s very hard for a firm, especially one that’s focused on investing for the long term, to commit to a multi-year shift.
Tariff fatigue is real. But don’t underestimate the pain they’ll cause
In any case, Apple’s a firm that’s been accelerating its efforts to diversify the supply chain. And while tariffs could go down across the board tomorrow, I still think diversification is always a wise idea. For now, there are a lot of extra costs that firms are forced to “eat.” Over time, though, it’s the American consumer who will feel the pain as higher prices, economic pressures, and AI automation weigh.
Indeed, it’s not hard to imagine that we’re all feeling a bad case of tariff fatigue. But that doesn’t mean it’s time to be complacent and expect Trump to backtrack anytime he makes a new tariff threat.
Though I wouldn’t overreact either way, I think it’s a smart idea to pay just a bit more attention to the names that can hold up in the face of the worst tariff down days. In this piece, we’ll check in on one recently-upgraded tech stock that I view as getting a “free pass” of sorts when the market experiences its next big tariff tremor.
After the latest round of Fed minutes, Chairman Jerome Powell admitted that some “difficult trade-offs” will need to be made in the coming months as he feels pressure from both sides, as tariffs look to cause a rise in inflation and unemployment. Either way, the bite of tariffs may be worse than the bark. And investors should prepare accordingly.
eBay stock is breaking out in the face of market-wide tariff turmoil
At this juncture, some of the more tariff-resilient (or even tariff-proof) stocks, I believe, aren’t getting as much respect as they rightfully deserve. eBay (NASDAQ:EBAY) stock has been quietly having a breakout moment of sorts, gaining 66% in the past two years and close to 17% year to date. With a higher-than-expected quarterly profit and revenue figure posted in the latest quarter, I’d be inclined to be a net buyer of the stock on strength.
Shares are still cheap at 17.4 times trailing price-to-earnings (P/E) to go with a 1.6% dividend yield. Additionally, eBay is making a strong case for why it deserves more of an AI multiple, with the firm spending considerable sums on generative AI to enhance the platform and customer experience. Indeed, connecting buyers with sellers seems like a job that AI could do very well.
Apart from the AI catalysts and low multiples, eBay looks like one of the better tech plays to ride out a tariff environment. As a digital marketplace, eBay doesn’t need to move a supply chain to dodge and weave past ever-changing tariffs.
And while tariffs will affect customer spending patterns, I do think many consumers may be inclined to buy secondhand rather than eat tariffs with the price of new goods that must be imported. As eBay’s merchants look to adapt in response to tariffs, I feel as though eBay’s model will allow it to better overcome Trump’s tariffs than many other retail plays out there.
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