SOX index swings to year-to-date gain after U.S., China agree to avoid escalating tariffs for now
Chip-related stocks, led by shares of Advanced Micro Devices Inc., closed higher Monday as fears of how the U.S.-China trade war would hurt the industry abated after a temporary truce.
The PHLX Semiconductor Index SOX, +2.67% surged to close up 2.7% after the U.S. and China called a temporary halt to escalations in their trade war. In comparison, the S&P 500 index SPX, +1.09% finished up 1.1%, with the index’s tech sector rising 2%, and the tech-heavy Nasdaq Composite Index COMP, +1.51% closed up 1.5%. The rally in the SOX index pulled it out of a loss on the year; it is now up 1.6% for 2018.
Among chip stocks, AMD AMD, -2.02% shares led the charge, rallying 11.3% to close at $23.71, their highest finish since Oct. 23. At the end of October, shares dropped as low as $16.85, or more than 50% off their 52-week high in September. Shares are up 131% on the year. Rival Nvidia Corp. NVDA, -1.20% shares surged 4% to close at $170.04, or 42% off their all-time high of $292.76 set on Oct. 2. On Monday, the company unveiled its $2,499 Titan RTX GPU, or T-Rex card, targeted for data scientists and AI researchers.
Those two stocks were the heavy lifters for the SOX. Among those closing higher than the index were Micron Technology Inc. MU, -1.20% with a 3.8% gain, Microchip Technologies Inc. MCHP, +3.68% with a 3.7% advance, MKS Instruments Inc. MKSI, +3.61% with a 3.6% gain, Cirrus Logic Inc. CRUS, +3.29% with a 3.3% rise, Qorvo Inc. QRVO, +2.95% with a 3% gain, and Applied Materials Inc. AMAT, +2.84% with a 2.8% advance.
Concerns about how tariffs would hamper growth at U.S. chipmakers started in earnest back in July following a ruling by a court in China blocking the sale of some Micron products.