Chip company stocks rallied on Wednesday, helping both the Nasdaq Composite and S&P 500 reach all-time highs. The upward momentum came despite mounting concerns over a possible trade war with China and regulatory crackdowns on big tech digital platforms including Facebook.
Texas Instruments gained more than 7% to close at $129, one day after reporting second quarter results that included a 9% decline in revenues. The financial results were nonetheless better than expected, and TI said it expects to continue sales to China despite trade worries, apparently helping the stock do well.
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In similar fashion, the VanEck Vectors Semiconductor ETF gained 2.7%, to hit a record close at $123.31. The chip company “is a proxy for global growth,” declared Kourtney Gibson, president of Loop Capital Markets in comments on CNBC.
Silicon Laboratories also saw a large gain of 6.5%, reaching $113.74, while Taiwan Semiconductor Manufacturing Ltd. was up 0.27%, to close at $44.54.
Stocks are broadly trading near their all-time highs, but some analysts are worried that there are signs of a mixed economy that could creep in and affect trading starting next year. Some chip companies are hopeful for progress on U.S. and China trade talks, with face-to-face meetings set to resume next week.
Nonetheless, the overall picture for the chip sector isn't entirely rosy.
Chip sales have generally been down globally, as well as chip manufacturing equipment.
In one example, Benchmark Electronics reported a 41% decline in capital equipment sales for the second quarter, but expressed hopes that the segment would improve in 2020. The company is also closing two manufacturing plants, affecting about 350 workers.