ASML Faces Downgrade as 2026 Outlook Weakens

The Standard and Poor's 500 lost 9.1% this week amid worries about the impact of US President Donald Trump's reciprocal tariffs on global economic growth and inflation.

The S&P 500 ended Friday's session at 5,074.08 after falling 5.8% in March. Its Q1 drop is now at 4.6% and the index is down 13.7% since the start of the year.

The US imposed 10% blanket tariffs on all countries that will take effect Saturday and additional duties on specific trading partners including China and Japan. Tariffs on Canada and Mexico, the US's largest trading partners, had previously been announced. Chinese goods imported into the US will face a 54% tariff rate starting April 9.

China plans to impose an extra 34% tariff on US goods starting April 10.

The escalating trade war has raised concerns about a possible global recession. Beijing will also limit exports of key rare-earth minerals and placed 11 US companies on an "unreliable entity" list.

Data this week showed the US goods and services deficit narrowed more than projected in February to $122.7 billion, according to the US Census Bureau and the Bureau of Economic Analysis. The deficit declined $8 billion from $130.7 billion a month earlier.

The March employment report showed nonfarm payrolls rose by 228,000, well above the 140,000 jobs increase expected in a survey compiled by Bloomberg. However, February payrolls had a downward revision to a 117,000 increase and January payrolls were revised down to a 111,000 increase, for a net downward revision of 48,000 jobs. The unemployment rate rose to 4.2% in March from 4.1% in February, compared with a 4.1% rate expected.

All sectors of the S&P 500 were in the red. Energy had the largest percentage drop, sliding 14%, followed by 11% decline in technology, a 10% loss in financials and a 9.4% decrease in industrials.

In energy, APA was down 27%. Capital One adjusted its price target on the company's stock to $35 from $38 and kept an overweight rating on it. Wolfe Research also reduced its price target on APA to $36 from $40 and kept an outperform rating on it.

Among technology stocks, Micron Technology fell 26%. Investors worry that US grant recipients in the microchip industry, including Taiwan Semiconductor Manufacturing , Intel , Micron Technology, GlobalFoundries , and Texas Instruments , face pressure to expand domestic operations or risk losing funding.

KKR was among those hit hardest in the financials sector, falling 19%. The private equity firm, along with EQT and FTV Capital, led a $500 million funding of ReliaQuest. The fresh capital will finance the expansion of AI-powered cybersecurity automation platform and drive international growth, ReliaQuest said.

Next week, the Q1 reporting season will kick off with reports expected from companies including JP Morgan Chase , Wells Fargo , Progressive , BlackRock , Constellation Brands and Delta Air Lines .

Economic data will include February's consumer credit report and March's consumer and producer price indexes.

By Philip van Doorn and Tomi Kilgore

There are many U.S.-based companies that derive most of their sales from overseas

MarketWatch readers have been asking a very good question in light of President Donald Trump's announcement of new tariffs on goods imported from dozens of countries: Which U.S. companies might be most affected by reciprocal tariffs or by other trade restrictions?

If only this were an easy question to answer.

Trump's 25% tariffs on imported cars illustrate how complicated a simple idea can be. These particular tariffs apply to cars whose final assembly is done outside the U.S. But even cars assembled within the U.S. are likely to have high percentages of parts made in other countries. And those parts are likely to be subject to Trump's tariffs.

One way to look at the question of which U.S. companies might be most affected if other countries respond to Trump's actions is to list companies based in the U.S. that have the highest percentages of revenue derived from customers in other countries.

A caveat to this approach is that we cannot tell if a U.S. company's revenue from overseas is sourced locally and not subject to tariffs or other trade restrictions. Then again, companies producing in local markets in other countries could still be affected by retaliatory moves by the other countries.

For example, Atlanta-based beverage giant Coca-Cola Co. (KO) generated about 61% of its 2024 revenue outside of the U.S. That said, as Chief Executive James Quincey explained in the latest earnings call with analysts, import tariffs aren't really a problem, because the company mostly operates as a local business, by producing where it sells.

"The vast majority of everything that's consumed in the U.S. is made in the U.S.," Quincey said, according to an AlphaSense transcript. "Similarly, we've merged every country around the world. And so while it's a global business, it's very local."

Still, FactSet compiles geographical breakdowns of companies' revenue based on annual reports. Another caveat is that companies take different approaches in how they report revenue by geography.

Most U.S.-based companies in the S&P 500 SPX break out U.S. revenue. But some only report sales for North America including the U.S., while others report combined sales for the U.S. and Canada together, but not separately for those countries.

Among the companies in the S&P 500 index, 478 are headquartered in the U.S.

Since Trump has specifically targeted Mexico and Canada for high tariffs, we excluded companies from the list that didn't break out U.S. revenue. So the initial list for non-U.S. revenue breakdowns was reduced further to 446 companies. This means a company such as Nike Inc. (NKE), which reports combined sales for North America but not for the U.S., was excluded from the list.

Among the 446 companies, these 20 had the highest percentages of revenue coming from outside the U.S. during their most recent full fiscal years, according to data compiled by FactSet:

   Company                              Ticker  Based in                % of annual sales coming from outside the U.S.Industry 
   Monolithic Power Systems Inc.        MPWR    Kirkland, Wash.                                                  97.5%Semiconductors 
   Lam Research Corp.                   LRCX    Fremont, Calif.                                                  92.6%Industrial Machinery 
   Booking Holdings Inc.                BKNG    Norwalk, Conn.                                                   89.5%Other Consumer Services 
   Teradyne Inc.                        TER     North Reading, Mass.                                             86.7%Electronic Production Equipment 
   Applied Materials Inc.               AMAT    Santa Clara, Calif.                                              86.0%Industrial Machinery 
   Schlumberger Ltd.                    SLB     Houston                                                          85.4%Contract Drilling 
   Newmont Corp.                        NEM     Denver                                                           84.7%Precious Metals 
   Albemarle Corp.                      ALB     Charlotte, N.C.                                                  83.2%Chemicals 
   Jabil Inc.                           JBL     St. Petersburg, Fla.                                             82.5%Industrial Machinery 
   ON Semiconductor Corp.               ON      Scottsdale, Ariz.                                                81.5%Semiconductors 
   Viatris Inc.                         VTRS    Canonsburg, Pa.                                                  76.7%Pharmaceuticals 
   Intel Corp.                          INTC    Santa Clara, Calif.                                              75.5%Semiconductors 
   Qualcomm Inc.                        QCOM    San Diego                                                        75.1%Semiconductors 
   Estee Lauder Cos. Inc. Class A       EL      New York City                                                    75.0%Household/ Personal Care 
   Broadcom Inc.                        AVGO    Palo Alto, Calif.                                                75.0%Semiconductors 
   Microchip Technology Inc.            MCHP    Chandler, Ariz.                                                  75.0%Semiconductors 
   Mondelez International Inc. Class A  MDLZ    Chicago                                                          74.0%Food 
   Baker Hughes Co. Class A             BKR     Houston                                                          73.5%Contract Drilling 
   Bunge Global SA                      BG      Chesterfield, Mo.                                                73.3%Agricultural Commodities/ Milling 
   Western Digital Corp.                WDC     San Jose, Calif.                                                 72.4%Computer Peripherals 
                                                                                                                                          Source: FactSet 

As noted above, a company might technically be based in the U.S. but book nearly all of its revenue from outside the country. An example is Monolithic Power Systems (MPWR) of Kirkland, Wash., a semiconductor manufacturer that derives most of its revenue from customers in Asia. Since most of the company's products are also produced in Asia, it's uncertain how much of that revenue will be affected by other countries' responses to new U.S. tariffs.

Also read: China has announced retaliatory tariffs, and these stocks are getting hit the hardest

In case you are wondering, Apple Inc. (AAPL) didn't make the list because only 36.4% of the iPhone maker's revenue for its most recent full fiscal year came from outside the U.S. And Nvidia Corp. (NVDA) generated 53% of its revenue from overseas in its latest fiscal year, while 51% of Tesla Inc.'s (TSLA) revenue was from outside the U.S.

Click on the tickers for more about each company.

Read: A detailed guide to the information available on the MarketWatch quote page

Don't miss: Trump Tariffs are rocking the markets, but investors are seeking refuge in these dividend stocks

-Philip van Doorn -Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

Technology stocks fell pre-bell Friday with the Technology Select Sector SPDR Fund 2.7% lower and the SPDR S&P Semiconductor ETF recently down 3.3%.

Intel and Taiwan Semiconductor Manufacturing have a preliminary agreement to form a joint venture to run the US company's chipmaking facilities, The Information reported, citing two people with knowledge of the matter. Shares of Intel and Taiwan Semiconductor Manufacturing were down more than 4% premarket.

Meta Platforms may be sued in Kenya over its alleged role in promoting content linked to ethnic violence in neighboring Ethiopia, Reuters said a Kenyan court ruled Thursday. Meta Platforms shares fell by nearly 4% pre-bell.

AppLovin provided an "indication of interest" to US President Donald Trump to explore an acquisition of TikTok in all markets outside China, according a regulatory filing. AppLovin shares declined by nearly 5% premarket.

The most-talked-about stocks in the Reddit subforum Wallstreetbets declined hours before Friday's opening bell.

Clear Secure declined by 8.8% pre-bell after closing Thursday with a 4.1% drop.

Tesla fell by 6% in premarket hours, following a 5.5% fall from the previous session.

Intel was down 5% hours before market open, swinging from a 2.1% increase at Thursday's close.

Apple was down 3.7% in pre-bell activity, sinking further after a 9.3% decline at Thursday's close.

Nvidia fell by 3.5% premarket, following a 7.8% fall from the previous session.

Antero Midstream was 1.8% lower premarket after closing Thursday with a 2.7% fall.

Nike declined by 2.3% in premarket hours after closing 14.4% lower on Thursday.

DTE Energy was down 0.4% pre-bell, swinging from a 1.1% increase at Thursday's close.

Taiwan's computer, server, and component manufacturers are bracing for a heavy blow from a newly announced 32% US tariff, far above the 10% to 20% rise expected by research agencies, Taipei Times reported Friday, citing Ministry of Economic Affairs data.

These products were Taiwan's largest export category to the US, valued at $6.84 billion in February alone, the report said.

Semiconductor firms, including TSMC, are currently exempt following Taiwan Semiconductor Manufacturing's additional $100 billion US investment. To cushion the impact, Wistron, via its unit Wistron InfoComm (USA), is investing $50 million in new US manufacturing operations.

The US remains Taiwan's second-largest export destination, accounting for 23.4% of exports last year, the highest in 24 years, the publication said.