Chip stocks surged sharply on Monday after the United States and China reached a breakthrough agreement to cut tariffs, easing months of pressure on global supply chains and technology exports. Major semiconductor players, including Nvidia, AMD, and Taiwan Semiconductor Manufacturing Company (TSMC) led the rally, buoyed by investor optimism over the 90-day truce that slashes US tariffs on Chinese goods to 30% and lowers China’s duties on American imports to 10%.
Nvidia shares climbed nearly 4% in early trading, while AMD jumped more than 5% and TSMC rose close to 5%. The relief was felt across the sector, with other chipmakers such as Broadcom, Qualcomm, and Marvell Technology also posting significant gains.
The agreement, which came after intense negotiations in Geneva, exceeded Wall Street’s expectations for tariff reductions and delivered an immediate boost to tech stocks globally.
The semiconductor industry has been at the centre of the US-China trade war, facing both direct and indirect impacts from steep tariffs that disrupted the flow of chips and components between the world’s two largest economies. The truce is expected to ease bottlenecks, reduce costs, and restore confidence in the supply chain, especially for companies that rely on cross-border manufacturing and assembly.
In addition to tariff relief, the US administration signalled a willingness to revisit and potentially relax some export restrictions on advanced AI chips, further lifting sentiment among investors and industry leaders. This move is seen as critical for companies like Nvidia and AMD, which have faced constraints on shipping their most advanced products to China.
The broader market responded with a strong rally, led by the Nasdaq Composite, as investors bet that the easing of trade tensions would support earnings growth and innovation in the technology sector.
While the tariff truce is set for 90 days pending further negotiations, the immediate reaction underscores the importance of stable US-China relations for the global semiconductor industry and the future of AI chip development.
