Silicon Valley return on Trump bet: Plunging valuations, delayed IPOs
The Nasdaq MarketSite in New York on June 9, 2023, was the backdrop for a significant turn of events. Silicon Valley executives and financiers who showed public support for President Donald Trump’s 2024 presidential campaign are now facing the consequences as the market takes a hit.
Following Trump’s announcement of a sweeping tariff plan, the Nasdaq experienced sharp consecutive daily drops, ending the week 10% lower, marking its worst performance since the onset of the Covid pandemic in 2020. Tech industry CEOs who eagerly contributed to Trump’s inauguration and attended events in Washington, D.C., are now grappling with the aftermath.
The outlook is bleak as economists and investors express pessimism, with concerns rising about a potential recession. The seven most valuable U.S. tech companies collectively lost $1.8 trillion in market cap over just two days. Apple saw a 14% decline for the week, Tesla, led by Elon Musk, a top Trump adviser, plummeted 9.2%, and Amazon, Nvidia, Meta all suffered double-digit drops.
The impact of the tariff hikes is not limited to the stock market; it has also affected the IPO market. Companies like Klarna and StubHub postponed their IPOs due to market turbulence. CoreWeave, a provider of artificial intelligence infrastructure, managed to raise over $1 billion in a U.S. IPO but had to slash its offering, facing volatility in trading.
Venture capitalists and tech executives who previously supported Trump are now facing scrutiny. Some defend their positions on social media, while others remain silent amid the chaos. With the market in turmoil, the future remains uncertain, and the need for reassurance from leadership grows.
As the situation unfolds, the tech industry braces for further challenges, with the hope that stability will return to the market. The impact of Trump’s policies reverberates across sectors, raising questions about the long-term health of the economy. Amidst the uncertainty, CEOs and investors must navigate the turbulent waters ahead, providing guidance and stability in a rapidly changing landscape.
