The Xiaomi stock price has pulled back in the past few weeks as investors focus on the ongoing economic war between the United States and China. After surging to $26 in March, the stock has plummeted by over 26% to the current $19. This article explores why the Xiaomi share price could rebound in Hong Kong.

Xiaomi’s business is thriving, but faces a key risk

Xiaomi share price has crashed in the past few weeks as tensions between the US and China have escalated. These tensions have led to a sharp increase in tariffs between the two superpowers, with the US charging Chinese goods a 145% tariff. China has responded by announcing a 125% tariff. 

On the positive side for Xiaomi, it has little business in the United States, with most of its sales coming from China and the emerging market, especially in China. Available data shows that the company has a 1% market share in the US. It also manufactures most of its products in China.

Therefore, from a tariff perspective, Xiaomi is largely insulated from the ongoing trade war. Even if it had a market share in the US, its products would not be tariffed since Donald Trump announced that smartphones would be exempt from the tariffs.

However, Xiaomi faces a major risk in that the company still uses American-made parts, especially from Qualcomm. Qualcomm’s SnapDragon’s chips power its most advanced smartphones, with the rest coming from MediaTek, a Taiwanese company. 

Therefore, the ongoing trade war means that Trump can turn its screws on Xiaomi by banning sales of chips to the firm. This action would mirror what he did with Huawei, a company that once dominated the smartphone market. While Huawei has rebuilt its business, its market share has shrunk considerably in the past few years. 

The other risk is that Xiaomi has entered the electric vehicle industry, making it a direct competitor to Elon Musk’s Tesla. Musk is one of Trump’s top advisors, meaning that he could engineer some actions against the company, including sanctioning top suppliers like Infineon.

Read more: Here’s why the Xiaomi stock price is beating Apple

Xiaomi earnings download

The most recent results showed that Xiaomi’s business is doing well. Its results showed that revenues jumped to over 109 billion RMB in the fourth quarter from 73 billion in the same period last year, a 48.8% increase.

The gross profit soared by over 43% to 22.45 billion RMB, while the profit for the period surged by 90% to 8.9 billion RMB. The annual revenue, gross profit, and profit soared by over 35%, 22.5%, and 34.9%, respectively. 

These numbers are impressive because they came at a time when Apple, the biggest player in the industry is slowing. Apple’s annual revenue rose by just 2.02% in 2024, down from 2.8% in 2023 and 7.79% a year earlier. 

Further, Apple has struggled to have a hit product in the past few years, with its Vision Pro’s sales being negligible. Xiaomi has launched a highly popular EV, and just recently, it raised over $5.5 billion to expand the division.

Xiaomi stock price analysis

The daily chart shows that the Xiaomi share price peaked at $59.3 earlier this year and then plunged to $35.8 as the trade war escalated. It has now moved above the 100-day and 200-day Exponential Moving Averages (EMA), a sign that bulls remain in control. It also formed a small bullish island reversal pattern. 

Xiaomi stock price has moved to the major S/R level of the Murrey Math Lines. Therefore, the shares will likely continue rising as bulls target the strong pivot reverse point at $50, up by about 15% above the current level.

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The specter of costly trade tariffs, once a painful memory for businesses like UK advanced materials manufacturer Goodfellow, has returned to haunt global supply chains.

During Donald Trump’s first term, a sudden levy on steel and aluminum added roughly £100,000 to a single shipment mid-journey across the Atlantic. That sting hasn’t been forgotten.

This time, as threats of new second-term tariffs loomed, the Cambridge-based company saw clients proactively seeking ways to expedite orders.

“We had conversations with people about whether [orders] could be sped up to pull them forward,” Andrew Watson, Goodfellow’s chief financial officer, acknowledged the limitations imposed by manufacturing lead times in a report published by The Guardian.

This sense of déjà vu, and the scramble to get ahead of potential cost hikes, has played out across countless industries worldwide in recent weeks.

Navigating the tariff maze

Suppliers globally rushed to move goods into the US before Trump’s anticipated “liberation day” announcement, a frantic effort to shield margins from potentially crippling duties.

While the White House eventually announced a 90-day pause on additional tariffs for most countries except China, the damage was arguably done.

The established rhythms of international commerce have been thrown into disarray, leaving a trail of market turmoil and deep uncertainty.

The sheer scale of the initially proposed tariffs caught many off guard, forcing manufacturers – from car parts producers to chocolatiers – into reactive measures.

Companies scrambled to shift extra stock or reroute products entirely, causing noticeable spikes in the cost of short-term shipping contracts and air freight as capacity tightened. Swiss chocolate giant Lindt & Sprüngli, for instance, preemptively sent additional inventory from its US factory in New Hampshire to Canada to circumvent retaliatory Canadian tariffs.

A spokesperson confirmed to the same publication that Lindt was “evaluating our global sourcing strategy for Canada to safeguard supply.”

Short-term spikes, long-term shifts

This volatility was immediately reflected in shipping costs.

Peter Sand, chief analyst at Xeneta, informed The Guardian, that the industry dynamic: “The huge amount of uncertainty always brings around opportunities for carriers to take advantage of an unfortunate situation… often by hiking rates.”

Data from the shipping analytics firm illustrated this point sharply.

On April 1st, average spot rates for a standard 40ft container (FEU) from China surged 9% to $322 for the US East Coast and a significant 16% to $383/FEU for the West Coast.

Air freight felt the pressure too, with spot rates from Vietnam to the US climbing 8% and from China to the US rising 5% in the first week of April.

While spot rates are expected to remain choppy in the near term, prompting ports to brace for potential congestion, analysts foresee a different long-term picture.

As the US and China remain entrenched in their escalating trade dispute, demand for shipping between the two economic powerhouses is predicted to slump, likely pushing down longer-term contract rates eventually.

Congestion builds as contracts hang in the balance

Compounding the immediate disruption, tariffs on specific goods like steel, aluminum, and cars were not included in the 90-day reprieve. This prompted immediate action from major auto manufacturers.

Jaguar Land Rover and Audi temporarily halted US-bound exports, creating instant bottlenecks at key transport hubs.

Bremerhaven in Germany, one of the world’s largest vehicle handling ports processing 1.5 million vehicles annually, reported “a slight increase in export stock.”

While its owner, BLG, insisted space remained available, it conceded that carmakers and shippers were making “short notice” decisions about which vehicles would actually board US-bound vessels.

This turbulence strikes at a particularly vulnerable moment for importers.

March and April are traditionally when US companies lock in crucial annual long-term shipping contracts, set to commence May 1st. These contracts are vital for businesses needing reliable, cost-effective transport for large volumes.

“The timing couldn’t be any worse,” stated Xeneta’s Peter Sand.

Many are holding back if they can and relying more on the spot market, avoiding locking themselves into contracts for volumes on trade lanes that may not be profitable to them a week or a month from now.

Trade diversion and dumping fears

Beyond the short-term scramble, businesses are embarking on the complex, often multi-year process of rethinking their supply chains.

The goal is to reduce exposure to tariff-affected routes, but as experts warn, finding alternative suppliers and establishing new networks isn’t a simple switch.

Businesses are “trying to understand the ramifications of how to manage their supply chain,” observed Marco Forgione, director general of the Chartered Institute of Export & International Trade.

He anticipates significant “trade diversion” as companies seek growth in other markets away from the US.

This diversion carries its own risks, particularly for regions like the European Union.

Experts warn that without swift action to reinforce its own trade barriers, Europe could become a recipient of surplus Chinese goods unable to enter the US market – effectively, a dumping ground.

The port of Antwerp-Bruges in Belgium has already been wrestling with massive influxes of Chinese electric vehicles for months, even before this latest tariff wave.

“The UK, and others, will need to strengthen their guard against an increased focus from Chinese suppliers who have to dispose of product originally intended for the US market,” Ian Worth, a customs director at Crowe, advised The Guardian.

While potentially lowering consumer prices short-term, such dumping could harm domestic manufacturing efforts.

A new storm brewing: proposed port fees

Adding another layer of complexity, a separate proposal from the Office of the US Trade Representative (USTR) threatens further disruption.

Costly port fees, potentially around $1 million per call, have been suggested for Chinese-built ships docking at US ports.

Aimed at revitalizing American shipbuilding, the measure targets the reality that most major global shipping lines rely heavily on Chinese-manufactured vessels.

The proposal triggered significant industry backlash, with warnings that it would inflate consumer prices, harm US agricultural exports, and jeopardize dockworker jobs if ships reduced their US port calls (currently averaging four per voyage from Asia).

While the USTR has reportedly indicated it is reconsidering the fees, with more clarity expected soon, it represents yet another potential upheaval.

For now, the only certainty for businesses navigating the currents of global trade is continued, pervasive uncertainty.

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Semiconductor stocks have pulled back this year, hurting top exchange-traded funds that have long provided growth and stability. This crash is attributed to the ongoing trade war between the US and China, and the lingering fear that the artificial intelligence (AI) bubble may have bursted. 

Top chip stocks have plunged

NVIDIA, the biggest semiconductor stock, has dived to $110 from the highest point this year. This decline happened after its financial results showed that its business was growing moderately. Its numbers showed that revenues jumped by 78% to $39.3 billion, leading to an annual figure of $130 billion.

The company’s guidance is that its quarterly sales will be $43 billion and that its gross margins will be between 70.6% and 71%. While this is still strong revenue growth, analysts anticipate that the trend will continue slowing. The average estimate is that the annual revenue will be $204 billion, a 56% annual growth, followed by $251 billion next year.

Other top semiconductor stocks have also plunged. AMD, a top player in the CPU and GPU industries, has plunged by over 47% from its 2024 highs. Broadcom, which crossed the important $1 trillion market cap in 2024, has plummeted by 28% from its highest point this year.

Intel, a company that dominated the semiconductor industry, has now become a fallen angel, with its stock falling to $19.75. Other top chip stocks like Marvell Technology, On Semiconductor, Ambarella, Microchip, Texas Instruments, and Micron have all tumbled.

Read more: Nvidia stock receives a downgrade despite strong earnings

SOXX, SOXL, SMH, and FTXL ETFs have plunged

The ongoing performance of the semiconductor industry has had a negative impact on ETFs that track the top players. The closely-watched Nasdaq Semiconductor ETF (FTXL) has plunged by 20.7% this year. Its assets have also plunged, with their net outflows rising to over $168 million. It has shed assets in all months this year.

Similarly, the VanEck Semiconductor (SMH) ETF has had net outflows of over $1.06 billion, bringing its current assets to over $18.5 billion. The iShares Semiconductor ETF (SOXX) stock price has dived by over 20% this year, while its assets have had an outflow of over $1.19 billion.

The worst-affected in terms of performance is the Semiconductor Bull 3x ETF (SOXL), whose stock has plunged by over 62% this year. Yet, it has been a winner in terms of assets, as its inflows have risen by over $3.8 billion to $8.14 billion.

AI bubble concerns remain

There are two main reasons why semiconductor stocks and ETFs have crashed this year. First, there is a risk that the industry will become a victim for the ongoing trade war. As in the past, there is a likelihood that Donald Trump will place tariffs on imported goods from China and other countries. 

As the trade war escalates, the US may decide to ban some of its chips from Chinese products. A good example of this is when Trump banned Qualcomm’s products on Huawei, crippling the company.

Second, there is a risk that the AI bubble is bursting, as the world deals with an oversupply of AI models. A good example of this is Microsoft, which is now halting data center projects globally. That is a sign that other companies will do the same, which will lead to a slow growth over time. 

The challenge is that the industry does not have another major driver to offset the slow growth in the AI space. That’s because other industries in the sector like personal computing, gaming, and Bitcoin mining are no longer growing as they did in the past. 

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European stock markets kicked off the week on a positive note Monday, as investors grasped onto a sliver of stability following recent trade turmoil, turning their attention partly towards the upcoming first-quarter earnings season.

A temporary exemption for electronics from new US tariffs provided the primary catalyst for the upward momentum, even as contradictory signals from Washington kept underlying uncertainty firmly in place.

The Stoxx Europe 600 Index reflected the improved sentiment, rising 2.0% by 8:05 a.m. in London.

Technology shares were notable beneficiaries after the White House indicated, via guidance from US Customs and Border Protection issued late Friday, that smartphones, computers, and other electronic components would be spared from the hefty “reciprocal” tariffs announced earlier by President Donald Trump.

This initial move, which imposed levies up to 145% on certain Chinese goods, had threatened significant disruption, particularly for tech giants like Apple (NASDAQ:AAPL) heavily reliant on Chinese supply chains.

Across the continent, major indices followed suit. By 03:05 ET (07:05 GMT), Germany’s DAX index had climbed 2.1%, France’s CAC 40 added 2%, and the UK’s FTSE 100 rose 1.5%.

The broader pan-European Stoxx 600 index also posted gains of 1.4%.

The relief rally suggested investors were speculating, or perhaps hoping, that the intense market backlash following Trump’s initial tariff volleys might temper the administration’s future actions, leading to a less damaging trade conflict overall.

Tariff whiplash: uncertainty remains paramount

However, the sense of calm proved fragile. Over the weekend, President Trump himself muddied the waters, suggesting the electronics exemption was merely temporary.

He indicated plans to announce separate tariffs specifically targeting electronics, potentially including semiconductors, as early as the coming week.

Furthermore, he emphasized that electronics imports from China were not entirely off the hook, stating they remained subject to a separate 20% tariff imposed back in March.

This back-and-forth underscored the persistent lack of clarity surrounding US trade policy.

Shifting focus: ECB meeting looms garge

With a light economic calendar in Europe on Monday, market participants are already looking ahead to a pivotal meeting of the European Central Bank (ECB) later this week.

Policymakers face a complex balancing act, needing to factor in the renewed economic headwinds generated by trade tensions and the recent strengthening of the euro against the dollar.

Analysts at ING suggested the ECB’s perspective has likely evolved since its March gathering, according investing.com.

Back then, optimism was cautiously building, supported by factors like Germany’s fiscal policy shifts and increased European defense spending, with interest rates perceived as nearing a neutral level.

Now, however, “new US tariffs on European goods, coupled with a rising euro and falling energy prices, have raised concerns over growth and disinflation in the near term,” according to ING, potentially prompting a more cautious stance from the central bank.

Corporate currents: tech shines, Holcim plans spin-off

On the corporate front, the tariff news directly benefited European technology stalwarts.

Shares in companies like semiconductor equipment maker ASML (AS:ASML) and software giant SAP (ETR:SAPG) registered strong gains, reacting positively to the temporary reprieve for electronics largely sourced from China.

Separately, Swiss building materials company Holcim (SIX:HOLN) provided an update on its strategic plans, announcing that the anticipated spin-off of its significant North American business is targeted for June.

This move remains subject to shareholder approval at the company’s annual general meeting scheduled for May 14.

Oil market stabilizes amid demand worries

Meanwhile, in the commodities sphere, oil prices found some stability on Monday after enduring recent declines.

The earlier losses were primarily driven by concerns that the escalating trade friction between the US and China – the world’s two largest oil consumers – would inevitably dampen global economic growth and curb demand for fuel.

As of 03:05 ET, Brent crude futures saw a minor dip of 0.1% to $64.67 a barrel, while US West Texas Intermediate (WTI) crude futures also edged down 0.1% to $61.44 a barrel.

Both benchmarks had shed approximately $10 per barrel since the beginning of the month, highlighting the tangible impact of trade war anxieties on energy markets.

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The Neos S&P 500 High Income (SPYI) ETF has retreated this year as American stocks dived amid concerns about the technology sector and the ongoing trade war between the United States and China. After peaking at a record high of $51.40 in February, the stock has plunged to $46. So, is the 13.4% yielding fund a good investment to buy?

What is the SPYI ETF?

The Neos S&P 500 High Income ETF is a popular covered call ETF that directly exposes investors to the S&P 500 index, while generating higher monthly income. 

Its main advantage against the S&P 500 index is that it offers a higher monthly dividend than the S&P 500 index. It has a dividend yield of about 13.4%, compared to the S&P 500, which yields less than 2%. 

The SPYI ETF is similar to JPMorgan’s JEPI fund, which has accumulated over $40 billion in assets under management. The only difference is that it tracks all companies in the S&P 500 index, while JEPI focuses on about 135 companies. 

After investing in these companies, the SPYI fund generates an income by writing call options on the S&P 500 index. A call option is a trade that gives investors a right but not an obligation to buy an asset. This call option trade gives it a premium, which it distributes to its investors. 

Therefore, the SPYI ETF makes money in three main ways. It benefits when the stock is in a strong uptrend, dividend payouts, and the covered call option trade. 

How is the SPYI ETF doing?

SPYI and other covered call ETFs are built to do better than the S&P 500 index in periods of high volatility. That’s because the covered call premium helps to compensate the ongoing decline in the stock market. 

Also, as a dividend-focused fund, the payout ratio increases as the fund goes down. That happens because the amount of dividend payouts to investors remains the same as the stock price drops. 

The SPYI ETF and other American stock indices have plunged this year because of the ongoing jitters on trade and artificial intelligence. According to SeekingAlpha, the total return of the S&P 500 index this year is minus 8.8%. 

In contrast, the SPYI ETF has a total return of minus 9.60%, while JEPI has been a better performer, dropping by 6.17%. 

Is SPYI ETF a good investment?

Therefore, the question is whether the SPYI fund is a good investment to use. History shows that the S&P 500 index has better returns than the top covered call ETFs when considering the total return. Unlike a price return, the total one considers the dividend returns.

Therefore, analysts recommend investing in the popular S&P 500 index because of its long performance history. Also, popular S&P 500 funds like VOO and SPY charge a small fee to their investors. 

SPY has an expense ratio of 0.09%, while VOO and IVV charge a tiny fee of 0.03%. In contrast, SPYI has a ratio of 0.68%, while JEPI charges 0.35%. 

Other analysts recommend investing a large portion of their funds in S&P 500 index and a portion of it to the covered call ETFs like SPYI and JEPI.

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