On Monday, the stock market received a major boost after President Trump returned from the G-20 Summit in Japan. President Trump agreed to continue negotiating with China and postpone tariffs on $300 billion worth of Chinese goods.
The S&P 500 rose 21 points and tech companies were leading the charge. Companies like Apple, Alphabet, and Alibaba all saw their stock rise after the announcement.
Chip makers, in particular, benefitted from the news, since President Trump also removed the ban on U.S. companies doing business with the Chinese telecommunications company Huawei.
Trump lifts the ban on Huawei
The chipmakers that saw the biggest rise were those that do the most business with Huawei. In May, President Trump blacklisted Huawei from doing business in the U.S. Trump cited national security concerns as the reason for the ban.
Then in a surprising reversal, the President said the ban was unfair to U.S. suppliers and reversed it. However, President Trump did specify that Huawei can buy goods from U.S. companies when there’s no national security risk.
Huawei is the third largest buyer of semiconductors, which makes it an important partner for companies like Micron and Nvidia. In 2018, Huawei accounted for 4% of global semiconductor purchases.
Skyworks Solutions saw its stock go up more than 6%, shares of Micron Technology rose 4.4%, and Qorvo went up nearly 6%.
Opportunities to invest in the chip industry
In light of the reprieve from the trade war, the chip industry provides an interesting opportunity for investing. In particular, Advanced Micro Devices may be a good stock to invest in.