Last week, U.S. President Donald Trump caused a significant stir in the stock market, leading to losses exceeding $6 trillion. His unexpected announcement on tariffs heightened fears of a recession, prompting sell-offs across Wall Street. However, a dramatic rally followed yesterday, spurred by Trump’s 90-day pause on reciprocal tariffs with most countries, excluding China, which is also noteworthy.

This pause resulted in one of the most substantial one-day market gains in history. The S&P 500 surged by 9.52%, marking its largest daily gain since 2008. The Dow Jones Industrial Average rose by 7.87%, its biggest jump since March 2020, while the Nasdaq Composite soared by 12.16%, achieving its second-best day ever. This shift offered investors a much-needed respite.

In light of this rally, stocks of the so-called Magnificent 7 tech giants, including Tesla (TSLA), NVIDIA (NVDA), Amazon (AMZN), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META), saw significant increases. The critical question now is—are these stocks good investments moving forward?

While the market’s bounce back is noteworthy, caution is warranted. Trump’s unpredictable nature regarding policy and the ongoing trade war indicate that this situation is far from resolved.

Ongoing Market Volatility

Despite the rally, one day of gains cannot compensate for the economic damage already done. Importantly, the tariff pause is not indicative of a full retreat; many key tariffs remain active. This includes a persistent 10% tariff on nearly all imports and a 125% tariff on Chinese goods, as well as tariffs on steel, aluminum, and select products from Mexico and Canada.

While markets celebrated the tariff pause, underlying tension in trade continues to escalate. Following a 104% tariff imposed by the U.S. on Chinese goods, China retaliated with an 84% levy, resulting in Trump’s decision to raise tariffs to 125%.

Goldman Sachs, which previously made a U.S. recession its baseline scenario, shifted its position after the tariff announcement. Still, the firm anticipates only 0.5% GDP growth and maintains a 45% chance of recession, underscoring that the tariff relief may not be a comprehensive solution.

While this tariff pause could spark a temporary rally, the market will likely face continued volatility. Consequently, while a battle may have been won, the larger conflict and its economic repercussions persist.

Evaluating the Magnificent 7 Post-Rally

Tesla: The electric vehicle (EV) leader experienced a remarkable 23% surge in shares during the rally, escalating Elon Musk’s net worth by $36 billion in just one day. However, the company faces mounting challenges, with increased competition putting pressure on its core EV business. Tesla’s future success hinges on developments in autonomous driving technology, making it wise for new investors to wait for tangible progress before diving in.

The Zacks Consensus Estimate for Tesla’s 2025 EPS reflects a year-over-year growth of 9.5%, but this estimate has decreased by 1 cent over the past week, and the stock holds a Zacks Rank of #3 (Hold).

NVIDIA: Shares increased nearly 19% yesterday. Recognized as the leader in AI chips, data centers, gaming, and autonomous vehicles, NVIDIA is strategically positioned as the AI revolution unfolds. As demand for AI infrastructure accelerates, the company’s data center segment remains solid, indicating a strong investment opportunity now.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2026 EPS suggests a remarkable year-over-year growth of 47.5%, with the estimate rising by 2 cents over the last 30 days. The stock currently has a Zacks Rank of #2 (Buy).

You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Amazon: The e-commerce leader increased by 12% following the rally. The company’s successful logistics, retail, and cloud operations bode well for future growth. Its delivery capabilities are impressive, achieving over 9 billion same-day or next-day shipments in 2024. While its investments in AI reveal long-term ambition, near-term monetization remains uncertain amidst strong competition.

The Zacks Consensus Estimate for AMZN’s 2025 EPS shows a year-over-year growth of 13.5%, though the estimate has slightly declined by 4 cents recently. The stock has a Zacks Rank of #3.

Apple: Following a notable 4-day losing streak, shares rebounded by 15% after concerns emerged regarding its heavy reliance on international manufacturing, particularly from China, which faces rising tariffs. With iPhone sales plateauing due to steep competition, such as from Huawei and Xiaomi, the company’s dependencies are precarious. Weak demand has also triggered production cuts for its Vision Pro headset, and delays in AI improvements raise red flags.

The Zacks Consensus Estimate for AAPL’s fiscal 2025 EPS points to a modest 7% year-over-year growth, but the estimate has dropped by 4 cents recently. The stock currently holds a Zacks Rank of #4 (Sell).

Microsoft: Shares of MSFT rose 10% yesterday. The company…