Nasdaq 100: Taiwan Semiconductor, Nvidia, Micron Propel Market Surge

Why Are Chip Stocks Soaring?

Tech stocks exploded higher Monday as the U.S. and China agreed to slash tariffs from 125% to just 10% for 90 days. This breakthrough sent semiconductor shares surging, with Micron (MU) jumping 7.6%, Marvell Technology (MRVL) rising 6.4%, and Advanced Micro Devices (AMD) climbing 5.7%.

Nvidia (NVDA), despite ongoing restrictions on chips shipped to China, gained 3.9% to $121.15. The temporary pause exceeded Wall Street expectations, creating massive gaps up on stock charts at the opening bell.

Can Supply Chains Recover?

The 90-day tariff reduction arrives at a critical juncture for tech companies with significant China exposure. Apple (AAPL), which manufactures 90% of iPhones in China and previously warned tariffs would add $900 million to quarterly costs, saw shares rise 6%.

Taiwan Semiconductor Manufacturing (TSM), the world’s largest chipmaker, surged 4.8% to $184.97, while Super Micro Computer (SMCI) gained 7.9% to $34.52. European chip equipment maker ASML (ASML) rallied 4% as global semiconductor supply chains showed signs of stabilization.

What Does This Mean For Broader Markets?

Treasury yields moved sharply higher as recession fears eased, with the 10-year yield climbing 6.6 basis points to 4.441% and the 2-year jumping more than 10 basis points to 3.985%. Rate cut expectations diminished significantly, with CME’s FedWatch Tool showing just an 11.3% likelihood of a June reduction as economic outlook improves. This sentiment shift comes after economists had warned of potential recession risks if high reciprocal tariffs remained in place.

Are New Market Highs On The Horizon?

“With US/China clearly on an accelerated path for a broader deal, we believe new highs for the market and tech stocks are now on the table in 2025,” noted Daniel Ives of Wedbush Securities. Trade Secretary Scott Bessent expects to meet with China “in the next few weeks” to discuss a more complete agreement, potentially extending the current market momentum. BMO’s Ian Lyngen added that “thawing of trade relations between the US and China will afford the Fed further flexibility” in managing monetary policy.

How Should Traders Position Now?

The semiconductor sector, previously battered by trade tensions, stands to benefit most immediately. Qualcomm (QCOM) rose 3.6% to $150.36, while Broadcom (AVGO) climbed 4.9% to $218.45. Intel (INTC) and Texas Instruments (TXN) also posted strong gains as the Philadelphia Semiconductor Index outperformed broader markets.

While President Trump didn’t directly target chipmakers with tariffs, many chips exported to China are assembled into servers and computer equipment that were expected to face duties when shipped to the U.S.

Amazon (AMZN) jumped 8% as sellers reliant on Chinese products breathed easier, while Chinese tech stocks like Alibaba (BABA), JD.com (JD), and Baidu (BIDU) also rallied sharply.

The reprieve signals potential for sustained tech outperformance through year-end as supply chains stabilize ahead of critical retail seasons. Traders should monitor upcoming U.S.-China negotiations closely, as the current rally hinges on progress toward a permanent resolution.

Carol Schleif of BMO Capital Markets noted the timing is especially critical “as retailers and suppliers work to ensure that shelves are stocked for the all important back-to-school and holiday shopping seasons.”

More Information in our Economic Calendar.