What Happened?
A number of stocks jumped in the afternoon session after President Trump landed in Beijing alongside Nvidia CEO Jensen Huang and Micron CEO Sanjay Mehrotra for a summit with President Xi Jinping, raising hopes that the two sides could reach a deal to ease chip export restrictions and stabilise rare earth supply chain, the two pressure points that have most constrained the sector.
Micron led the advance, with the broader Philadelphia Semiconductor Index building on its recent AI-driven momentum. Markets priced in higher odds of a U.S.-China tariff agreement by May 31, with speculation centred on a “small deal” , likely an extension of the 90-day tariff truce and some relief on rare earth export curbs that China has used as leverage.
Analysts cautioned that a sweeping semiconductor-for-rare-earth equipment swap remained unlikely on national security grounds, but the mere presence of chip CEOs in the room at a presidential summit was enough to move the sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
Zooming In On IPG Photonics (IPGP)
IPG Photonics’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 2.2% on the news that hot April CPI sent Treasury yields higher, eliminating 2026 rate-cut hopes, a direct headwind for high-multiple growth stocks.
Semiconductor companies sell into long-cycle hardware demand, but their stocks behave like growth equities, valued on future earnings. The discount rate investors apply to those future earnings is set by Treasury yields. When yields rise, as they did during the day on the hot CPI print, the present value of future earnings falls mechanically, compressing the price-to-earnings multiple investors are willing to pay.
IPG Photonics is up 43% since the beginning of the year, but at $107 per share, it is still trading 30.5% below its 52-week high of $153.91 from February 2026. Despite the year-to-date gain, investors who bought $1,000 worth of IPG Photonics’s shares 5 years ago would now be looking at only $562.60.
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