AAPL shares increased by 2.3% after Trump’s tariff proposal and Cook’s commitment to a $600 billion investment
by VT Markets
/
Aug 7, 2025
Apple’s share price has recently gone up. This increase comes after news of a 100% tariff on chip and semiconductor imports.
Companies that invest in U.S. manufacturing will be exempt from this tariff. In response, Tim Cook, Apple’s CEO, announced a $600 billion investment in U.S. manufacturing over the next four years.
Apple’s Investment Pledge
This investment is a significant jump from the $43 billion Apple invested over the last four years. Following this announcement, Apple’s stock rose about 2.3% in after-hours trading.
Apple’s price reaction reflects concerns about the new semiconductor tariff and the $600 billion investment promise. This spike appears mostly based on headlines. The market seems to overlook that this investment is more than ten times Apple’s actual capital spending in recent years.
Such headline-driven spikes increase implied volatility, making options trading more expensive. Now, implied volatility on Apple options has risen over 30%, the highest level since late 2024’s earnings reports. For traders, this makes buying puts more costly, but there’s a good chance to sell out-of-the-money call spreads to bet against any further irrational price increases.
It’s hard to fully trust the $600 billion investment promise when we consider the facts. The whole U.S. CHIPS and Science Act of 2022, a major government initiative, set aside just over $52 billion to boost the entire domestic semiconductor industry. One company claiming to invest over ten times that amount just for a tariff exemption stretches our belief.
Policy-Driven Market Reactions
We can learn from the trade war escalations of 2018 and 2019. Market rallies driven by single announcements or tweets usually faded within weeks as concrete details remained unclear. The best strategy now is to watch this initial excitement peak before preparing for a pullback to a more sensible valuation.
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by VT Markets
Aug 7, 2025
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