Apple Inc. (AAPL) shares dropped by 5% on Friday following two major announcements that rattled investor confidence: a reduction in its stock buyback program and a projected $900 million increase in costs due to U.S.-China tariff tensions.

During Apple’s quarterly earnings call, CEO Tim Cook warned that the company is bracing for a significant tariff-related financial blow in the current quarter. This development comes as the Sino-U.S. trade conflict continues to escalate under the Biden administration, following tariff policies initiated during the Trump era.

The reduction in share repurchases also surprised many investors. For years, Apple’s aggressive buyback strategy has helped bolster its stock price and deliver consistent shareholder returns. Scaling back on this program signals a more cautious approach amid uncertain macroeconomic and geopolitical conditions.

Apple’s status as one of the world’s most valuable companies — often trading places with Microsoft — has made its performance a key bellwether for tech sector sentiment. This recent pullback underscores the broader investor anxiety surrounding global trade policies and their impact on U.S. tech giants that heavily rely on Chinese manufacturing.

With $900 million in additional tariffs expected to impact operational costs, analysts fear Apple may face margin pressures or pass costs onto consumers, potentially affecting product pricing or demand.

As the U.S.-China economic relationship remains strained, tech companies like Apple are navigating a delicate balance between business interests and policy pressures. Investors will be watching closely in the coming weeks for how Apple and its peers respond to this evolving trade landscape.