Global technology and chip stocks surged on Monday after the U.S. and China agreed to pause most tariffs on each other’s goods. The trade tensions between the world’s two largest economies had previously threatened supply chains, causing significant disruption to major U.S. companies, particularly in the tech and semiconductor sectors.
Relief for Technology Stocks
Technology stocks, especially semiconductor firms and smartphone makers, had been hit hard by the ongoing trade war. But the news of a temporary pause in “reciprocal” tariffs between the U.S. and China sent a wave of relief through investors. This move has allowed markets to regain some confidence, especially among companies that were facing tariff-related hurdles.
Strong Performance in Semiconductor Stocks
In the U.S., several semiconductor giants saw sharp increases in stock prices. Nvidia rose about 4%, despite still facing restrictions on chips it can send to China. AMD jumped nearly 6%, and Broadcom climbed about 5%. Qualcomm also experienced a similar uptick in its share price. Other companies in the semiconductor supply chain, such as Marvell, surged 7%. These gains were part of a broader rally in tech stocks.
The Magnificent 7 Rises
The so-called Magnificent 7 — the biggest tech stocks — all saw gains, adding $800 billion in combined market capitalization. This was the largest collective increase since April 9. Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, saw a 6% jump in its U.S.-listed shares, while ASML and Infineon also rallied in Europe.
Exemptions and Tariff Concerns
While semiconductors and certain electronics had been exempt from President Trump’s tariffs last month, the U.S. government signaled that these products could still face special duties in the future. Investors have been concerned about the impact of these tariffs on major tech stocks, particularly those with heavy exposure to China, such as Apple and Amazon.
Apple and Amazon See Gains
Apple, which still manufactures 90% of its iPhones in China, stated that tariffs would add $900 million to its costs in the current quarter. Despite this, Apple shares saw a 6% rise on Monday. Amazon, which also relies heavily on Chinese products for its marketplace, saw an 8% increase in its stock price as well.
Surge in Chinese Tech Stocks
U.S.-listed Chinese tech stocks also benefited from the news. Alibaba, JD.com, and Baidu all saw their shares climb, signaling investor optimism about a potential resolution in the trade dispute between the U.S. and China.
Future Outlook for Tech Stocks
Daniel Ives, the global head of technology research at Wedbush Securities, commented that with the U.S. and China seemingly on an accelerated path toward a broader trade deal, new highs for both the stock market and tech stocks are likely in 2025. Investors are expected to focus on the next steps in trade negotiations, which will continue over the coming months.