Why Semiconductor Stocks Were on Fire Yesterday

Market indexes rise

Major technology companies, particularly semiconductor stocks, rose on Wednesday amid the wave of optimism about a trade deal between the US (SPY) and China (MCHI) (FXI). The major market indexes closed high on April 3, led by strong gains in the chip stocks. The NASDAQ Composite rallied 0.6% to $7,895.55 and reached its six-month high. The S&P 500 and the Dow Jones Industrial Average also climbed 0.2% and 0.1% to $2,873.4 and $26,218.3, respectively.

Chip ETFs also rallied on positive news about a potential trade deal. The VanEck Vectors Semiconductor ETF (SMH) reached its 52-week high of $112.5 and gained 2.33% on April 3. The iShares PHLX Semiconductor (SOXX) and the SPDR S&P Semiconductor (XSD) also soared 2.21% and 2.59%, respectively, on Wednesday.

Why Semiconductor Stocks Were on Fire Yesterday

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Semiconductor stocks on the rise

Besides hopes of positive trade talks, coverage initiation by a Wall Street analyst on four semiconductor stocks and a potential recovery in smartphone sales have also encouraged investors, resulting in chip stock gains.

Among the chip stocks, Intel (INTC) was one of the top gainers on the Dow Jones, and gained 2.06% on Wednesday, after reaching a ten-month high. Chip and data storage giant Advanced Micro Devices (AMD) rose nearly 8.5% and ended at $29.02. Micron (MU) and NVIDIA (NVDA) also gained 3.44% and 3.07%, respectively. Marvell (MRVL) and NXP Semiconductors (NXPI) also rose 2.23% and 3.65%, respectively, adding to the rise.