Wall Street was poised for a subdued start Monday as major semiconductor stocks declined ahead of a key tariff deadline tied to a recent trade policy shift with China.
Chipmakers Nvidia and Advanced Micro Devices (AMD) saw premarket losses of 0.4% and 1.2% respectively, following news that these companies agreed to share 15% of their revenue from advanced chip sales to China with the U.S. government. This revenue-sharing deal comes days after the Commerce Department began issuing licenses for Nvidia’s H20 chip sales to China, News.Az reports, citing Reuters.
The agreement is a key part of a broader trade understanding between Washington and Beijing signed earlier this year. It expires Tuesday, leaving markets eager to see if it will affect economic relations between the world’s two largest economies.
“It’s a way for the U.S. government to increase income, but many will argue it’s the wrong approach,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. He added that China may seek alternative chip suppliers amid concerns over potential U.S. oversight.
Investors also await further clarity on sector-specific tariffs announced by U.S. President Donald Trump.
At 8:48 a.m. ET, Dow futures were up 0.14%, S&P 500 futures gained 0.07%, and Nasdaq futures edged higher by 0.04%, after last week’s rally delivered the S&P 500 and Nasdaq their best weekly gains in over a month.
The market optimism is fueled partly by expectations that the U.S. Federal Reserve could adopt a more dovish stance following recent labor market weakness. Analysts anticipate a total of around 60 basis points in rate cuts by year-end.
Earnings season has also eased concerns. Micron raised its fourth-quarter revenue and profit forecasts amid strong AI-related demand, boosting its shares by 5.1%. Apple, after its best week in five years following major U.S. investment pledges, saw its shares dip 0.5% Monday.
Meanwhile, lithium stocks surged after Chinese battery maker CATL halted production at a major mine, potentially tightening supply amid softer demand. Albemarle and Lithium Americas both rose more than 10%.
Intel’s shares climbed 2.7% after reports that CEO Lip-Bu Tan plans to visit the White House, following calls by President Trump for his removal last week.
Separately, Trump is scheduled to meet Russian President Vladimir Putin on Friday in an effort to negotiate an end to the conflict in Ukraine.
