Apple has tumbled 20% this year as President Donald Trump's tariff threats have clouded the outlook for the company. - Michael M. Santiago/Getty Images
President Donald Trump’s swipes at Apple aren’t just bruising the company’s bottom line — they may also be taking a bite out of your 401(k).
The president’s chaotic trade war continues to threaten Apple’s business model, which relies extensively on international supply chains. Apple’s stock has tumbled 20% this year after hitting a record high in December. The company’s stock dropped 3% in one day earlier this month after Trump demanded Apple move all of its production to the United States.
As the tech giant grapples with the president’s tariff threats, Americans’ retirement savings have taken a hit, too.
Apple, the third-largest US company by market value, is a core component of many retirement plans, such as 401(k)s. Retirement savings are often invested in funds that track the S&P 500, and (AAPL) accounts for 6% of the S&P 500’s value, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
The S&P 500 is weighted by market value. That means the larger a company is, the more it influences the index.
The tech giant has shed nearly $1 trillion in market value this year. Its market value topped a record high $3.9 trillion in December, according to FactSet, but was down to just above $3 trillion as of Friday.
Apple isn’t the only stock souring. Shares of other large companies like Amazon (AMZN), Google (GOOGL) and Tesla (TSLA) have tumbled 6%, 9% and 14% this year respectively, which could also cause the values of 401(k)s to stall.
The two largest companies in the United States by market value, Microsoft (MSFT) and Nvidia (NVDA), have gained 9% and 0.6% respectively this year. The S&P 500 is up just 0.5% as other stocks have lagged.
“You just can’t continue to keep an economy and companies operating in a cloud of extraordinarily high uncertainty forever without some economic consequences eventually,” said Scott Ladner, chief investment officer at Horizon Investments.
Americans collectively held $44.1 trillion in retirement assets at the end of 2024, according to data from the Investment Company Institute. Of those funds, about $8.9 trillion were held in 401(k)s. Retirement savings are long-term investments, and short-term volatility is often overcome by long-term gains.
As evidenced by the S&P 500’s rally in recent weeks, it’s ill-advised to try and sell your portfolio in times of panic because you can miss out on rebounds in the market. Historically, short-term downturns are overcome by gains. Market downturns can be unnerving, but the stock market generally rewards investors who are patient.
Protecting your retirement savings
Trump’s trade war has dealt a blow to some of America’s most widely held stocks, and investors — whether Wall Street titans or regular folks with a 401(k) — have been left to stomach the volatility.
Blue-chip stocks have fluctuated, and the reliable strategy of buying and holding has been put through the wringer as stocks have bounced around without much clarity.
It’s important to know what your retirement savings are invested in to ensure your portfolio is well diversified, said Tim Steffen, director of advanced planning at Baird Private Wealth Management.
While funds that track indexes like the S&P 500 are relatively well diversified, different 401(k) plans can offer funds with different exposures to areas of the market. It’s helpful to know how much you have invested in big names like Apple to better gauge how policies affect your portfolio during periods of volatility.
“You may think you’ve got a very diversified account because you have four different mutual funds, but if all four of those funds are tracking the same type of stocks, you probably don’t have a very diversified portfolio,” Steffen said.
Market downturns are opportunities to check your exposure and consider diversifying. Investing in mutual funds or exchange-traded funds that track bonds or international stocks can help mitigate risk and offset sharp declines.
“That’s really the point behind mutual funds or ETFs,” Steffen said. “It’s an efficient way to get a diversified portfolio.”
Thomas Martin, senior portfolio manager at Globalt Investments, said Apple has certainly been “having a tough year,” but he doesn’t think the company is in “any danger of being a long-term underperformer.”
“I don’t think people should be looking at the value of their 401(k) on a daily basis,” Martin said, noting that it is long-term money that will grow over years and decades.
The outlook for Apple’s share price
Apple faces two major “unknowns” this year, according to Angelo Zino, a senior vice president and technology analyst at CFRA Research.
“First and foremost, it’s the tariff talk,” Zino said.
The tech giant is at the top of the list of companies exposed to uncertainties around tariffs, he said. “We need to wait to see what that outcome is going to look like, and that’s creating uncertainty in the share price right now.”
Then there are the ongoing antitrust concerns against fellow tech giant Alphabet (GOOGL), Google’s parent company. A federal judge in August ruled Google had an illegal monopoly on search, which could signal trouble ahead for Apple because the case centered in part on exclusive deals between Google and Apple, according to Zino.
Despite the fluctuations, Apple is still seen as a strong and resilient investment, said Zino and Sam Stovall, chief investment strategist at CFRA Research. The strategists at CFRA, who have a “buy” on the stock, said its “premium valuation” is justified by factors including strong capital returns and its stable free cash flow.
“The Street has continuously tried to kill off Apple at times,” Zino added. “There’s always been something out there, and Apple has always been able to find a way to evolve.”
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