Why Are NVIDIA And Other Chip Stocks Trading Higher On Monday?

Nvidia Corp NVDA and semiconductor stocks Broadcom Inc AVGO, Taiwan Semiconductor Manufacturing Co TSM, Advanced Micro Devices, Inc AMD, Arm Holdings ARM, Micron Technology, Inc MU, Marvell Technology, Inc MRVL, ON Semiconductor Corp ON surged on Monday.

The positive reaction followed the report that Beijing and Washington temporarily agreed to lower tariffs on each other’s products.

The agreement will reduce U.S. levies of 145% on most Chinese imports to 30%, while China’s 125% duties on U.S. goods will drop to 10% for a 90-day period, Bloomberg reported on Monday. The deal followed weekend negotiations in Geneva.

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Last week, Wedbush analyst Daniel Ives said that China negotiations remain a key focus of the markets and the tech world. He highlighted investor concerns over the 145% “black cloud” China tariffs and many restrictions hitting Nvidia and other tech companies, with the negative ripple impact in the supply chain front and center.

Last week, reports indicated the Trump administration’s planning to repeal a key Biden-era export restriction on AI chips.

The recent crackdown on Nvidia selling a specialized AI chip to China prompted the company to book a $5.5 billion charge.

The rollback targets the “AI diffusion rule,” which will go into effect on May 15. The Trump administration is exploring blocking China from accessing advanced chips without hurting American technology companies.

Big Tech giants, including Nvidia and Microsoft Corp MSFT, had criticized the diffusion rule, citing a loss of business opportunities for American companies.

Price Action: NVDA stock traded higher by 3.62% to $120.87 at the last check on Monday.

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