Global technology and semiconductor equities surged on Monday after Washington and Beijing announced a 90-day suspension of most reciprocal tariffs, offering relief to companies that have weathered months of supply-chain uncertainty and cost pressures. In the U.S., chipmakers and hardware vendors led the advance, while Asia and Europe saw sharp gains in their own tech heavyweights.

In premarket trading, shares of Nvidia leapt 4 percent and Advanced Micro Devices jumped 5 percent, reflecting investor optimism that producers of high-performance graphics and data-center chips will see healthier end-markets once tariffs ease. Broadcom, Qualcomm and Marvell Technology also rallied between 5 and 7 percent as the industry’s broad supply chain anticipated a renewed flow of orders and calmer sourcing dynamics.

Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, climbed 4 percent in U.S.-listed shares, while ASML, the Dutch supplier of lithography machines crucial for manufacturing the most advanced chips, gained 4.5 percent on European exchanges. Infineon Technologies and STMicroelectronics likewise posted strong jumps, underscoring the global breadth of this technology-sector lift.

Tariff Pause Provides Critical Breathing Room

The tariff truce caps a trade war that began with the imposition of duties as high as 145 percent on Chinese-made goods and 125 percent on American exports. Under the agreement, U.S. levies on Chinese imports will be cut to 30 percent from May 14 through August 12, while China will reduce its duties on U.S. goods to 10 percent over the same period. Although certain anti-fentanyl surcharges and pending exclusions will remain in place, the deal represents a mutual rollback of more than 90 percentage points—a striking de-escalation compared to recent peaks.

“We see this as a significant reprieve for tech firms that have been grappling with higher input costs and protracted shipping delays,” said Daniel Ives, head of technology research at Wedbush Securities. “The next three months could allow companies to clear excess inventory, finalize production plans and restore buyer confidence ahead of the busy second-half product cycle.”

Among U.S. technology bellwethers, Apple shares surged more than 7 percent after the company noted in its latest earnings call that its costs for the current quarter would carry nearly $900 million in additional tariffs. The prospect of lower duties promises to alleviate a material drag on margins for manufacturers that assemble products in China and sell them worldwide.

Amazon, whose marketplace hosts a vast array of Chinese-made consumer goods, jumped 8 percent, with investors expecting that relief from duties will boost both vendor margins and consumer demand. Microsoft, whose Azure cloud services rely on data centers stocked with chips from various suppliers, climbed 3.5 percent as well.

Broader Equity Markets Follow Suit

The U.S. stock market’s reaction extended beyond tech. S&P 500 futures rose 3 percent, while the Nasdaq Composite signaled gains exceeding 4 percent at the open. In Europe, a basket of technology shares outpaced other sectors, with the STOXX Europe 600 Tech Index jumping nearly 4 percent.

Asian markets also celebrated the diplomatic breakthrough. Tokyo’s Nikkei 225 added 2.7 percent, buoyed by chip-making and electronics names. In Hong Kong, the Hang Seng Tech Index surged 6 percent as investors piled back into Chinese internet and hardware stocks. China’s CSI 300 index posted a 3-percent gain, reflecting renewed confidence that bilateral trade flows will normalize.

Semiconductor manufacturers have been assessing whether to realign production footprints after years of relying heavily on Chinese foundries. The tariff reprieve grants breathing room for firms to postpone or moderate shifts toward alternative locations such as Taiwan, South Korea and the United States. Nonetheless, many executives remain committed to diversification, citing broader geopolitics and pandemic-era disruptions as long-term catalysts for reshoring.

“While this 90-day cessation is welcome, it does not eliminate the strategic imperative to reduce single-country dependencies,” noted a senior executive at a major fabless chip company. “We will continue to balance capacity across our global network, but at least we now have time to plan without the overhang of immediate tariff spikes.”

Officials on both sides emphasized that the pause is a tactical move, not a comprehensive resolution. U.S. Treasury Secretary Scott Bessent described the truce as a temporary mechanism to stabilize markets while negotiators pursue a broader framework addressing issues such as intellectual property protection, forced technology transfer and state-subsidy reforms. Chinese negotiators likewise stressed their desire for a “balanced, mutual respect” dialogue over the coming months.

Analysts expect follow-up meetings in Shanghai and Washington, although precise dates have yet to be disclosed. Market watchers will closely track any indications of progress on structural reforms, which could determine whether the tariff rollback is extended or if duties return to their recent highs after mid-August.

Investor Sentiment and Valuation Adjustments

With uncertainties over trade easing, investors have begun to re-rate technology shares, incorporating lower margin risks and potential volume rebounds. Price-to-earnings multiples on key chip companies expanded by 10 to 15 percent on the day, reflecting renewed growth expectations. Portfolio managers are also eyeing late-cycle opportunities: a recovery in enterprise hardware spending and a rebound in consumer electronics demand as tariffs fall ahead of new product launches.

In emerging markets, local currency-depreciation pressures eased as investor flows reversed from safe havens to risk assets. The Chinese yuan strengthened against the dollar, while the South Korean won and Taiwanese dollar saw modest gains. Commodity-linked currencies such as the Australian and Canadian dollars also benefited, buoyed by the prospect of elevated technology exports.

Despite the upbeat market reaction, some economists caution that the temporary nature of the truce could limit its economic impact. Remaining tariffs and the potential for renewed escalation pose ongoing risks to business confidence and capital spending. Furthermore, sectors outside technology—such as automotive and agriculture—remain vulnerable to quotas and duties not covered by the current agreement.

“Investors should remain vigilant,” warned a senior economist at a global bank. “This pause doesn’t eliminate the possibility of a full-scale resumption of tariffs if talks stall. Companies must continue to hedge their supply chains and maintain visibility on cost trajectories.”

As the financial world reacts to this sudden thaw, attention now turns to the next phase of negotiations. For technology and semiconductor firms, the immediate focus will be on capitalizing on the tariff respite: finalizing inventory planning, ramping up production for key silicon nodes and coordinating with customers to optimize order pipelines. Over the longer term, the industry will be watching closely to see if the U.S. and China can convert this short-lived ceasefire into a durable accord—a development that could reshape the economics of global technology for years to come.

(Adapted from BusinessInsider.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy