Semiconductor stocks soar on telegraphed trade truce with China

Semiconductor stocks, which were sold hard when US-China trade tensions flared up earlier this month, are being scooped up again in earnest after top officials from both countries indicated that positive discussions this weekend had cleared the runway for the world’s two largest economies to reach a deal.

The VanEck Semiconductor ETF fell nearly 6%, its worst one-day drop since April, on October 10 when President Trump said he was mulling a “massive increase” on imported Chinese goods, later floating the potential for levies of 100%. It’s up nearly 2% as of 9:04 a.m. ET, with the likes of Micron, Advanced Micro Devices, Nvidia, and Broadcom outperforming. Intel — with roughly 30% last year’s sales coming from billings in China — also rose on the news.

Other stocks in the group doing well are wafer fab equipment makers Applied Materials and Lam Research, which had recently drawn the ire of US lawmakers because of their exposure to China — their most important market. Cadence Design Systems, an electronic design automation company that’s seen restrictions on its China business imposed and then removed this year, is also up.

“With tariffs and trade threats back and forth the last few weeks escalating on the China rare earth threats it appears a much broader trade framework/deal could be on the table this week between US and China which would be a huge groundbreaking moment for the tech sector and markets,” Wedbush Securities analyst Dan Ives wrote. “This continues to be a lingering overhang on tech stocks that could be removed as the far reaching impact around the AI Revolution from chip production, Nvidia/AMD sales into China, software IP complexity, TikTok, and rare earth restrictions are all on the table in this game of high stakes poker between Trump and Xi.”