Micron (NASDAQ:MU) led semiconductor stocks higher on Monday, underpinning a broader rally in tech, as Washington decided to extended a reprieve given to Huawei that allowed the Chinese telecom to continue to do business with U.S. companies.
Also giving the sector a boost was NVIDIA (NASDAQ:NVDA), up more than 6.7% on news that Microsoft (NASDAQ:MSFT) will use Nvidia’s RTX video graphics units to spice up the visuals of its popular world-building game "Minecraft."
U.S. semi suppliers like Micron Technology) that count Huawei as an important customer were given a much-needed lifeline after the U.S. extended a license that lifts restrictions on U.S. companies from selling or transferring technology to Huawei.
The "temporary general license" will be extended for Huawei for 90 days, Commerce Secretary Wilbur Ross confirmed. The extension would give U.S. companies more time to move away from Huawei products, Ross added.
The ban was set to be reinstated on Monday and had raised feared that U.S. semiconductor companies may have to halt shipments to Huawei, a move that could not only hurt orders but exacerbate the chip inventory overhang that has plagued the sector.
The temporary reprieve added to investor hopes that the U.S. and China would increase efforts to engage in more constructive trade talks - following a recent uptick in threats by both nations - with President Donald Trump reportedly due to meet with U.S. Ambassador to China Terry Branstad on Monday.
Micron), Qualcomm (NASDAQ:QCOM) Intel (NASDAQ:INTC), Advanced Micro Devices Inc (NASDAQ:AMD) and Nvidia were all set to end the day in green, though the last was boosted by its Microsoft (NASDAQ:MSFT) announcement.
The announcement comes just a week after Nvidia released better-than-expected earnings, led by its gaming sector, which accounts for the bulk of revenue.
The Philadelphia Semiconductor index was up more than 2% on the day, taking its gains for the year so far to about 31%.
