Chipmakers head for best month since 2011
The industry benchmark is on track for a two-day climb of 5.3%, which would be its biggest back-to-back rally since January.Updated: Jun 28, 2019 16:30 IST
Semiconductor companies rallied on Thursday, extending a recent uptrend as investors bet that the Trump administration would avoid escalating its trade war with China when the two countries meet at the Group of 20 summit over the weekend.
The Philadelphia Semiconductor index rose 1.7%, building on a 3.2% advance in the previous session. The industry benchmark is on track for a two-day climb of 5.3%, which would be its biggest back-to-back rally since January.
Recent gains have taken the SOX up nearly 13% for the month of June. Closing with a rally of that magnitude would represent its largest one-month percentage gain since October 2011. Even with the recent climb, however, the index remains about 8% below record levels.
Chipmakers were broadly higher, with Western Digital up 3%, Applied Materials advancing 2.6% and NVIDIA higher by 2.1%. Advanced Micro Devices added 2.5%; late Wednesday, Wedbush started coverage on the company with an outperform rating.
The sector’s Wednesday rally was supported by hopes for easing trade tensions as well as better-than-expected results from Micron Technology. Micron built on its 13% jump on Wednesday by rising an additional 1.8% on Thursday.
Semiconductor companies have been highly correlated to the U.S.-China trade war, as many companies count the country as a key market or a vital part of their supply chains. Earlier on Thursday, the Wall Street Journal reported that China’s terms for a trade truce will include an insistence that the U.S. lift its ban on the sales of technology to Huawei Technologies Co., a major customer for a number of chipmakers.
First Published: Jun 28, 2019 16:30 IST