Apple is set to announce a $100 billion investment in the US. The announcement will be made today with Tim Cook attending, and Apple shares are up 1.41% in premarket trading at $205.80.
Earlier this week, Apple’s share price fell below its 100-day moving average at $206.05. The current share price of $205.80 remains beneath this threshold, indicating potential upside if it surpasses this level. The company’s all-time high share price reached $260.10.
Apple produces much of its goods in India and China, which are affected by US tariffs. This situation creates challenges due to the cost differences between domestic and international manufacturing. It is uncertain if Apple’s US investment will lead to tariff exemptions for iPhones. The specifics of what will be manufactured in the US remain unknown.
In addition to iPhone tariffs, the US is considering tariffs on foreign-made chips, potentially increasing production costs. These measures could lead to higher consumer prices and supply chain issues. However, they also mean increased tariff revenue for Washington.
With today’s announcement of a $100 billion investment, we are seeing immediate volatility in Apple’s stock. The premarket price of $205.80 shows initial optimism but remains a key battleground. Traders should watch the $206.05 level, which is the 100-day moving average the stock fell below earlier this week.
A sustained move above this moving average could signal a bullish breakout, making call options attractive for short-term gains. However, failure to reclaim this level might be interpreted as weakness, suggesting the positive news isn’t enough to overcome bearish sentiment. This presents an opportunity for traders to consider put options if the price gets rejected at this resistance.
This situation feels familiar, reminding us of the tariff-driven volatility we saw back in the 2018-2019 period under the first Trump administration. We’ve seen Apple’s stock experience significant swings on similar geopolitical news over the past year, with a nearly 20% price range in the second quarter of 2025 alone. The uncertainty around whether this investment will shield Apple from new tariffs is fueling this tension.
This uncertainty is causing a spike in the cost of options. Implied volatility for Apple options expiring in the next month has already jumped above 40%, significantly higher than its 90-day average of 28%. Traders can sell options spreads, like an iron condor, to profit from this elevated premium if they believe the stock will stay within a defined range after the initial excitement fades.
The core issue remains the potential for tariffs on products from China and India, as well as on semiconductor chips. We still don’t know what specific products this new $100 billion investment will cover in the United States. This ambiguity means the risk of higher production costs and supply chain disruptions for key products like the iPhone remains very real.
Analysts’ reports from earlier this year, after the new trade framework was proposed in February 2025, estimated that shifting final assembly could add over $120 to the cost of each iPhone. These persistent cost concerns create a fundamental headwind against the politically positive announcement. For traders, this means any upward momentum could be fragile and subject to a sharp reversal on further tariff details.
Given the binary nature of the event, a simple strategy would be to use a straddle, purchasing both a call and a put option with the same strike price and expiration date. This allows a trader to profit from a large price swing in either direction, capitalizing on the high volatility without betting on whether the news is ultimately good or bad for the bottom line. The key will be whether the stock moves enough to cover the high cost of buying both options.
