US Chip and Industrial Stocks Rally as China Eases Export Curbs
Beijing's move to restart shipments of gallium, germanium, and rare earths signals a potential thaw in trade tensions and eases critical supply chain pressures.
Shares in U.S. semiconductor and industrial companies surged in morning trading after the White House announced that China is set to dismantle export restrictions on a slate of critical minerals essential for manufacturing everything from microchips to advanced weaponry.
The policy shift, which follows a high-stakes agreement between the U.S. President and Chinese leader Xi Jinping, is expected to restore the supply of materials including gallium, germanium, and rare earths. The news sent immediate ripples through markets, with the VanEck Semiconductor ETF climbing 3.2% and the Industrial Select Sector SPDR Fund rising 2.5%.
Chipmakers, who have been navigating severe supply chain volatility, were among the biggest beneficiaries. Shares of Nvidia, a key player in the artificial intelligence and data center markets, jumped 4.1% to trade around $202.49. The move was buoyed by a related development in the agreement, wherein Beijing has also agreed to cease investigations into major U.S. chip firms, according to a White House fact sheet released Saturday.
Industrial titans in the aerospace and defense sectors also gained ground. Lockheed Martin, a major defense contractor reliant on these materials for sophisticated electronics and guidance systems, saw its shares rise 2.8% to $491.88. The restored access to minerals is expected to lower input costs and provide greater production stability for the sector.
China, the world’s dominant producer of these strategic materials, had previously tightened export controls, citing national security concerns. Those curbs, implemented over the past few years, forced many U.S. and European companies to scramble for alternative suppliers and invest in developing domestic sources—a costly and time-consuming process. The restrictions created significant headwinds for industries integral to U.S. economic and national security.
Analysts see the reversal as a significant de-escalation in the protracted technology and trade standoff between the two economic superpowers. "This is a pragmatic step that alleviates a major pain point for the U.S. industrial base," noted one strategist at a major investment bank. "For sectors like semiconductors and defense, supply chain predictability is paramount. This announcement removes a significant layer of uncertainty that has clouded capital expenditure and production plans."
The original White House announcement detailed that China would issue general licenses for exporting these materials to U.S. end-users, effectively unwinding a multi-year squeeze on the American manufacturing sector. While the move is being hailed as a diplomatic breakthrough, industry experts remain cautiously optimistic. Many companies are expected to continue pursuing supply chain diversification strategies to mitigate the risks of future policy reversals.