Tech Stocks Soared This Week, but Uncertainty Persists

In a week of market volatility, the adtech sector was on fire this week after a down week to start April. The recovery is no surprise, as investors got a bit of good news from the Trump administration — at least relative to what we knew a week ago.

According to data provided by S&P Global Market Intelligence, shares of AppLovin (APP -5.29%) were up as much as 19.9%, Reddit (RDDT -1.03%) jumped 17%, and Spotify (SPOT -1.75%) was up 12.7%. The stocks were up 13.9%, 15.1%, and 8.4%, respectively, for the week on Friday at 3:10 p.m. ET.

Tariffs delayed

The announcement on Wednesday that tariffs on most countries around the world would be delayed by 90 days was met with wild enthusiasm by the market. Stocks shot up across the board, and that included a lot of tech companies and those who benefit from consumer spending and advertising, like AppLovin, Reddit, and Spotify.

To be clear, the news isn’t all good. The 10% tariff across the board is still in place, and the tariff on goods from China is 125% or more, depending on the time of day. Compared to the start of the month, tariffs are up, but the market is happier today than it was a week ago.

Advertising wins?

If a recession, which seemed extremely likely on a week ago, is avoided, it would be a boost to advertising companies, because consumers will be spending on more goods, and so will advertisers. That’s part of the reason these companies rose so much this week.

But there may still be headwinds. The companies advertising on these platforms have costs, and if their costs are going up because of tariffs, it may leave less money for customer acquisition on advertising platforms. On top of that, there’s still a very real possibility of a recession this year.

Higher costs across the board

The other two factors to layer in are rising interest rates and a falling dollar. A lower dollar makes it more costly to import goods from other countries — and that’s on top of the tariff impact.

Higher interest rates make it more costly to do everything from borrowing to start a business to buying a home. Higher rates are generally an indicator of slower growth, so that could be a headwind for the market.

More uncertainty ahead

While this week was generally positive compared to last week, investors aren’t out of the woods yet. It’s not yet clear if the 90-day pause on wider tariffs will lead to deals, or if higher costs are only put off for a few months. Then there’s the China tariffs, which are currently at 145%, but seem to change by the minute.

The market doesn’t know what to expect, and that’s part of the problem. What we do know is that consumer sentiment is falling, and it’s likely we will see inflation pick up later this year. That alone could be a reason for caution for companies counting on higher advertising spending to grow their revenue in 2025.