After peeking over the cliff of a tariff nightmare, Apple (AAPL) had its best day on Wall Street since 1998 — all thanks to President Trump’s sudden about-face on trade.
On Wednesday, Trump reversed course and announced a 90-day pause on most tariffs, excluding China.
The news sent Apple soaring 15% as investors bet that relaxed trade restrictions for key supply chain countries — including Vietnam, India, and Taiwan — would reduce costs for the tech giant.
Semiconductor stocks followed suit.
Aehr Test Systems (AEHR) surged 29.2%. Monolithic Power Systems (MPWR) climbed 23.4%. Alpha & Omega Semiconductor (AOSL) jumped 27.9%. And Microchip Technology (MCHP) popped 27.1%.
But here’s the catch: These companies weren’t even directly targeted by the tariffs.
The answer lies in the products semiconductors power — and the industries they fuel. PCs, smartphones, electric vehicles, and a vast array of consumer electronics — including those made by Apple — were all at risk of becoming collateral damage.
Most chips enter the U.S. inside other goods, which were on Trump’s tariff list.
That meant the semiconductor sector was never truly safe. Any tariff-induced spike in end-product prices would hammer demand and hit chipmakers where it hurts: revenue.
"Although semiconductors are exempt from the reciprocal tariffs, we are assessing the details and any impacts on our broader customer and partner ecosystem," a spokesperson for AMD (AMD) told Business Insider.
Fool’s gold for chipmakers?
Bernstein Research warned earlier this week that indirect exposure through electronics and machinery would have affected chipmakers more than most investors realized.
"Most semiconductors enter the US inside other things for which tariffs are likely to have a much bigger influence, hence secondary effects are likely to be far more material," Bernstein wrote.
Wolfe Research analyst Chris Caso seconds that view. In a recent client note, he argues that a “wave of order cancellations through the supply chain” would have likely followed if tariffs had moved forward as planned.
“We think there is simply nowhere to hide from these effects,” Caso warned.
According to The Wall Street Journal, citing Bernstein data, the U.S. imported $521 billion of machinery, $478 billion of electronics, and $386 billion of vehicles in 2024 — all heavy users of semiconductors.
If tariffs were to raise the cost of these goods, it could cripple demand and squeeze chipmakers’ top lines.
Adding to the uncertainty, Trump had warned just last week that tariffs on “chips are starting very soon.” In other words, even the brief exemption semiconductor firms enjoyed may have only been temporary.
For now, investors are breathing a sigh of relief, but the rally could just as easily unravel if policy shifts again.
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