MW Nvidia and AMD just helped chip stocks to their best day ever

By Emily Bary

Trump's pause on many hefty tariffs was the news 'everyone on the Street was waiting for'

The chip sector saw its best day on Wall Street on record Wednesday, as beaten-down semiconductor stocks rebounded in the face of President Donald Trump's decision to pause hefty reciprocal tariffs on many countries and instead set the rate at 10% for 90 days.

All 30 members of the PHLX Semiconductor Index SOX surged Wednesday - so much so that Taiwan Semiconductor Manufacturing Co. Ltd. $(TSM)$ (TW:2330), the smallest gainer in the index, saw a 12.3% pop. The biggest gains belonged to Microchip Technology Inc. $(MCHP)$ and Onto Innovation Inc. (ONTO), which were up 27.1% and 26.3%, respectively.

Advanced Micro Devices Inc.'s stock $(AMD)$ recorded its best day in nearly nine years, ending the session up 23.8%. Nvidia Corp.'s stock $(NVDA)$, with its 18.7% rise, saw its best day in about two years.

In all, the PHLX Semiconductor Index soared 18.7% and logged its best day on record, with data going back to May 1994, according to Dow Jones Market Data.

While raw semiconductors themselves weren't subject to the "liberation day" tariffs that Trump announced last week, chip stocks had still been weighed down heavily by the planned new levies. One reason is that products like servers and computers, which contain chips, weren't exempt from the tariffs. And as investors began to worry more about a potential recession, that fueled concerns about the sustainability of hardware spending in a possible downturn.

It's worth noting that while Trump said he would enact a 90-day pause on tariff hikes for many countries, he also said he would raise the tariff on China goods to 125%. Still, the move to lower reciprocal tariffs to 10% signaled that Trump is softening his stance and may be paying more attention to the economic ramifications of his tariff policies.

"This was the news we and everyone on the Street was waiting for as the pressure on Trump took on a life of its own and the eye-popping rise of the 10-year [Treasury] yield BX:TMUBMUSD10Y was ultimately too much to hold his line," Wedbush analyst Daniel Ives wrote in a note to clients.

Within the tech sector, "this was much-needed relief and pulls stocks and the market from the edge of the cliff," Ives added.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 09, 2025 18:46 ET (22:46 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.