- Tech stocks are rallying after President Trump and Chinese President Xi Jinping had a productive meeting at the G20 summit over the weekend.
- Trump agreed to hold off on imposing new tariffs on Chinese exports, and to suspend the administration’s ban on Huawei, a Chinese telecommunications giant.
- The administration’s ban would have prevented US tech companies such as Microsoft and Alphabet from doing business with Huawei.
- The truce sent shares of tech giants like Apple surging, along with semiconductor stocks.
- Visits the Markets Insider homepage to read more stories.
The trade war between the US and China is on pause, for now.
That development sent shares of tech stocks surging on Monday morning after President Trump agreed to a trade truce with Chinese President Xi Jinping – one that involved the postponement of additional tariffs on Chinese exports.
Trump also agreed to suspend his administration’s export ban on Huawei. The ban was implemented in May by Trump citing national security concerns.
US tech titans like Apple,Microsoft, and Alphabet– and chipmakers such as Broadcom,Nvidia, and AMD – saw their shares rise sharply on the news. They had all been feeling the squeeze from the trade war disrupting supply chains and potential sales in China, as well as the administration’s ban on Huawei.
Alphabet, Microsoft, Broadcom, Nvidia, and Intel all count Huawei as a customer for both software and hardware products.
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Trump’s decision at G20 will allow US tech firms to continue selling products to Huawei. Microsoft, which licenses its Windows operating system to Huawei to run its laptops, climbed as much as 1.5% on the news.
Alphabet Inc. rose as much as 1.5% on Monday morning, as Huawei also licenses Google’s Android operating system for its smartphones.
In the chipmaker space, Broadcom – which cut its revenue outlook for the year because of the Huawei ban – increased as much as 5% on Monday morning. AMD and Nvidia were also up as much as 5% before the opening bell.
The temporary truce between the world’s two largest economies is also good news for firms like Apple that have significant supply chain operations in China. Apple rose as much as 3% before the opening bell on Monday.
The positive step in the right direction announced between the two countries to not levy additional tariffs while negotiations continue, in essence this takes away the biggest risk on the Apple story (for now),” Daniel Ives, a managing director and equity research analyst at Wedbush Securities, said in a note to clients on Monday.
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