Why Are Semiconductor Stocks Trading Higher On Monday?

Zinger Key Points

Trump to impose new chip tariffs but signals flexibility for some firms; sector stocks rise on partial relief hopes.
Semiconductor imports to face duties, but smartphones and PCs spared; AI chipmakers still under pressure.
Memorial Day Special: Access your full investing command center with trade ideas, screeners, and expert insights—now 60%.

On Sunday, U.S. President Donald Trump shared plans to impose tariffs on imported semiconductors over the coming weeks. However, he promised flexibility with some companies in the sector.

Trump stressed the country’s focus on domestic production of chips and semiconductors, Reuters reports.

Also Read: Dell Cuts Discounts As Tariffs Hit, Passes Rising Cost To US Shoppers: Bloomberg

Semiconductor stocks, including Nvidia Corp NVDA, Advanced Micro Devices, Inc AMD, Broadcom Inc AVGO, Arm Holdings ARM, Micron Technology, Inc MU, Marvell Technology, Inc MRVL, and Intel Corp INTC, are trading higher on Monday.

Trump excluded smartphones and computers from his 145% reciprocal tariffs on China. On Sunday, He Also announced a national security trade probe into the semiconductor sector.

On Friday, Trump announced the exclusions from steep reciprocal tariffs, igniting tariff relief expectations for products like phones and laptops.

However, on Sunday, Trump’s commerce secretary, Howard Lutnick, clarified that critical technology products from China would face separate new duties along with semiconductors within the next two months.

The benchmark Standard & Poor’s 500 index has lost over 10% in value since Trump took office on January 20. Additionally, the tariffs could affect the demand-supply balance by making products dearer, thereby affecting companies’ revenue and profit margins.

The tech sector is already reeling from concerns over the sustainability of the massive artificial intelligence technology investments.

Trump also established a new body within the Commerce Department to manage the CHIPS and Science Act of 2022, which will benefit beneficiaries like Taiwan Semiconductor Manufacturing Co TSM, Intel, Micron, and more.

Beijing on Friday retaliated against the 145% U.S. tariff duties by increasing its tariffs on U.S. imports to 125%.

Semiconductor ETFs VanEck Semiconductor ETF SMH and iShares Semiconductor ETF SOXX have lost 18%-21% in value year-to-date.

Price Action: NVDA stock is trading higher by 3.13% to $114.40 premarket at the last check on Monday.

Read Next: