Tap Mag-7 ETFs on Temporary US-China Trade Truce

The group of tech giants — Apple AAPL, Amazon AMZN, Microsoft MSFT, NVIDIA NVDA, Tesla TSLA, Alphabet GOOGL and Meta META — known as the "Magnificent Seven" has been battered by the tariff turmoil. Roundhill Magnificent Seven ETF MAGS has lost 6.4% so far this year (as of May 12, 2025) against a loss of 0.3% seen in the SPDR S&P 500 ETF Trust SPY.

The latest U.S.-China temporary trade truce came as a surprising relief to the space. Responding to the trade deal, MAGS ETF surged 5.8% on May 12. The ETF has, in fact, surged 12.9% over the past month.

The recent rebound follows a rough period for Big Tech after President Donald Trump announced a "reciprocal tariff" plan on April 2, which wiped out $2 trillion in cumulative market cap from the Magnificent Seven.

Mag-7 Stock Performance Highlights Post US-China Trade Truce

Amazon and Meta Platforms spearheaded a significant rally among the "Magnificent Seven" tech stocks on May 12 afternoon, following the announcement of a temporary trade truce between the United States and China.

Stock Performance Highlights

Amazon surged 8.1% and Meta climbed 7.9% on May 12. Tesla gained 6.8%, pushing its market cap above $1 trillion. Apple rose 6.3%. NVIDIA jumped 5.4%. Google shares increased 3.4%. Microsoft added 2.4%.

Trade Truce Details

The United States agreed to temporarily lower tariffs on Chinese imports. The United States cut tariffs on Chinese goods from 145% to 30%, while China lowered American levies from 125% to 10%.

These reductions will last 90 days, following two days of high-stakes talks between the two nations. The new tariffs on small packages sent from China worth up to $800 have been cut from 120% to 54%, according to a White House statement.

Bullish Outlook for Tech Sector

The trade development is highly optimistic for tech stocks, particularly due to the easing of supply-chain concerns. Along with Apple, Tesla is also heavily dependent on Chinese parts and battery suppliers. No wonder, both shares surged. Moreover, Tesla is expected to debut its self-driving Taxi in June.

Impact of China on Big Tech

Amazon: 30% of product value on its platform comes from China; Chinese advertisers made up 14% of ad revenues in 2024, per Raymond James, as quoted on Yahoo Finance.

Meta: Chinese advertisers contributed roughly 11% of total ad spending, Raymon James noted.

Google: Chinese advertisers accounted for about 6% of ad revenues, Raymon James indicated.

Apple: 90% of iPhones are manufactured in China, representing 17% of 2024 revenues.

NVIDIA: Chinese clients make up between 20% and 40% of the company’s end customer base, according to DA Davidson analyst Gil Luria, as quoted on Yahoo Finance.

Any Wall of Worry?

Despite the temporary truce, the United States has imposed export bans on NVIDIA’s H20 AI chips to China, which has pressured NVDA shares. Hence, many are of the view that the phase of group-wide Mag-7 rallies appears to be over, replaced by a more scrutinized stock selection. However, no one still underrates the opportunities in the Mag-7 group.

ETF Picks

And if you want to go for group-wide picks, you have options like MAGS, Vanguard Mega Cap Growth ETF MGK, Invesco S&P 500 Top 50 ETF XLG and iShares S&P 100 ETF OEF to play on.

Meta-heavy ETFs likeFidelity MSCI Communication Services Index ETF FCOM can be played for specific stock preference.        Consumer Discretionary Select Sector SPDR Fund XLY invests about 35% of its basket in Amazon and Tesla.

While tensions are still present around chip restrictions (H20/NVDA), the stock cannot be ignored due to continued chip demand. So, keep a close look at the NVDA-heavy Strive U.S. Semiconductor ETF SHOC.

And if you like the resilience in MSFT shares and the recent rebound in the Apple stock, you can tap iShares Global Tech ETF IXN. The ETF also invests about 35% of its portfolio in the duo.

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This article originally published on Zacks Investment Research (zacks.com).

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