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The chips have fallen.
Chip stocks fell Friday, losing ground on the second trading day after President Donald Trump unveiled a set of global tariffs that sent stock markets dramatically lower—and the first since China announced its own retaliatory measures. The latest news provided investors with yet another indication of the ongoing trade war, at least in the short term.
The PHLX Semiconductor index (SOX), a measure of chip shares, fell by about 7% recently. Four of the components, namely Marvell Technology MRVL, Coherent COHR, Entegris ENTG and Micron Technology MU were each down more than 7%.
“Because a large number of finished electronics goods and IT Infrastructure goods are ultimately imported, from many of [the countries affected by the new tariffs],” UBS analysts wrote Thursday, “this could have a profound negative impact on electronics demand.”
Nvidia (NVDA), a stock that was a darling of the market last year, has dropped more than 7% during recent trading.
Citi analysts said yesterday that Analog Devices, a chipmaker of analog chips, could outperform other companies in a recession. The company’s shares have fallen 6% since the last trading session.
The tariff announcements this week have affected stocks in general. All three major indices are down about 4% today, and the Dow is not much better. All 11 of the S&P 500’s sectors were recently in decline; its semiconductor and equipment subindex was down about 7%.
China’s new tariffs against US imports will take effect on Thursday, according to the country’s Finance Ministry.
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UBS. “US Semiconductors – Initial Thoughts on the Tariffs – Indirect Demand Impact.”
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