U.S.-China relations

Semiconductor stocks rebounded strongly, spurred by OpenAI’s custom AI chip deal with Broadcom and signals of easing US-China tensions. Broadcom shares surged 10% on the news, while the VanEck Semiconductor ETF (SMH) jumped 4%. Nvidia, Taiwan Semiconductor (TSM), and Micron Technology saw significant gains. The rally reversed Friday’s losses driven by tariff concerns, with Trump alleviating anxieties regarding US-China relations. The OpenAI-Broadcom deal underscores the increasing demand for specialized AI hardware, reshaping the semiconductor landscape.

President Trump extended ByteDance’s deadline to divest its U.S. TikTok operations to December 16th, marking the fourth extension. The deal, involving Oracle and Silver Lake, aims to address U.S. national security concerns. Treasury Secretary Bessent indicated a “framework deal” was reached, averting a potential TikTok ban. The proposed structure involves an investor consortium controlling 80% of TikTok’s U.S. business, possibly migrating users to a new application. Trump and Xi are scheduled to discuss the deal, emphasizing its high-level significance. Completion is anticipated within 30-45 days.