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Apple Dodges the Tariff Bullet

Apple Dodges the Tariff Bullet

Trump’s 100% tariff on chips will come with several exceptions, including Apple.

Ankit Sinha
August 08, 2025

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Your Daily Dose of Market & Career Clarity

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🎯 In this issue:

Banana Bits: Finance headlines that actually matter
Market Summary: Stocks took a bit of a tumble on Thursday
What’s Ripe / Rotten: The tastiest and most disgusting stocks
Technical Trip: Interview Q&A from JP Morgan
Deal Dispatch: M&A, IPOs, and other transactions

Market Snapshot

📉 Banana Bits

Council of Economic Advisors Chairman Stephen Miran was selected as Fed Governor.
Eli Lilly reported $15.5 billion in revenue, beating the consensus of $14.7 billion, but the stock fell on GLP-1 trial results.
ConocoPhillips beat on quarterly revenue and EPS, but bottom-line declined from last year, driven by falling oil prices.
Toyota’s earnings were overshadowed by the company warning of a $9.5 billion profit hit from auto tariffs.
Trump’s 100% tariff on chips will come with several exceptions, including Apple.
B*tcoin and cr*pto related stocks jumped after Trump signed an executive order allowing 401(k)s to hold these assets.
OpenAI added some new bells and whistles with its updated GPT-5 update.
Mortgage rates hit their lowest level in months after the jobs report.
Rocketmaker Firefly flew 50% in its IPO trading debut yesterday.

Market Recap

Scary Thursday

The market got a little too big for its own britches yesterday, starting the day off on a high note only to come crashing down by midday, and then ending the day slightly in the red (S&P, Dow) or slightly up (NASDAQ). Quite a few things happened, so let’s make sure you’re up-to-date.

The day started off on an optimistic note, driven by speculation that Trump’s 100% tariffs would come with several exceptions for large companies. (See: TACO trade) Basically, investors chalked it up to nothing and viewed the tariffs as more posturing and negotiation rather than anything tangible.

That sent semis flying high, until people actually started parsing through the statement and confused themselves just enough to hit the pause button on buying more semiconductor stocks for now. Apple, however, still advanced as it became clear that they would get an exception.

Outside of the tech world, the tariff deadline expired for dozens of US trade partners to make deals, effectively sending tariffs into effect. According to the Yale Budget Lab, imports from nearly 200 countries now face duties ranging from 10% to 50%, and the overall average effective tariff rate is projected to jump to 18.6%.

Source

Meanwhile, a flood of negative earnings hit. The first was Caterpillar, which is a bellwether for the US economy. The company warned of a $1.5 billion profit hit coming from tariffs as their inputs become more expensive.

Toyota warned of a $10 billion profit drop driven by auto tariffs on imports to the US, while other consumer-facing companies like the fast food company Yum! Brands and hotel chain Marriott cut their outlook as well.

Source

Despite the midday reversal, the NASDAQ ended in positive territory, and the S&P was slightly lower. Not bad, and it shows that even with these tariffs in effect, investors are nowhere near as concerned as they were back in April when the market saw a 10-15% drop almost overnight, seemingly still believing that deals will get done.

What's Ripe

Dutch Bros (BROS) 21.6%

While Starbucks is asleep at the wheel, Dutch Bros is striking while the iron is hot. The coffeemaker reported Q2 sales of $415 million, up 28% YoY and above the $403 million consensus number.
Operating margins also increased to 13% from 9% on strong new openings of restaurants and skyrocketing demand in its existing locations, while cutting down on costs considerably.

DuoLingo (DUOL) 13.8%

Everyone was mad at Duolingo for employing AI to replace humans, but it looks like they’ve gotten over it. The company increased its guidance to $1.0 billion, up from $987-$996 million, driven by strong daily active user growth of 40%.
They also increased demand and cut down costs tremendously by employing AI tools like video-call conversations for paying subscribers.

What's Rotten

Eli Lilly (LLY) 14.1%

Eli Lilly had a decent quarter from a purely financial standpoint. They reported $15.5 billion in revenue, beating the consensus of $14.6 billion.
However, investors were left disappointed by its recent obesity drug trial, which showed that the highest dose helped patients lose almost 12% of their body weight, or roughly 27 pounds, at 72 weeks in a late-stage trial.

Airbnb (ABNB) 8.0%

Airbnb had a pretty decent report. The company reported EPS of $1.03, up an astounding 99% from last quarter, while topline revenue increased 13% to $3.03 billion.
Why did the stock fall? Investors are expecting weakness in the second half of the year after a strong first half of the year.

🧠 Technical Trip

Interview Q&A from JP Morgan

👉 Want 1-on-1 recruiting help from JP Morgan bankers & 2,000+ top mentors? Apply to WSO Academy

🦈 Deal News

M&A, IPOs, And Other Notable Transactions

Firefly Aerospace jumped over 50% in its IPO debut, hitting a $9.8 billion valuation.
Defense company, CSG, which makes armored vehicles and ammunition, is considering a €30 billion IPO in Europe.
US Foods engaged Performance Foods in talks for a merger. US foods fell as much as 9.3% intraday.
AT&T is looking to sell its Mexico operations for $2 billion after failing to compete with Carlos Slim’s dominant carrier in the country.
UnitedHealth Group and home hospice company Amedisys have reached a DOJ settlement in their $3.3 billion deal.
Citigroup hired Guillermo Baygual from rival company JPM as Co-Head of M&A.
The Winklevoss twins invested $2 million in a Trump-linked b*tcoin mining company.