What Happened?
A number of stocks fell in the afternoon session after China initiated a trade barrier investigation against the United States, escalating trade tensions. China's Ministry of Commerce announced it would begin two probes into U.S. trade practices, alleging they have disrupted global supply chains.
The move was seen as a direct retaliation to tariff investigations started by the U.S. administration earlier in the month. One Chinese investigation will specifically examine U.S. policies that restrict the export of advanced technology products to China and limit bilateral investment in key sectors. This action raises concerns about further trade restrictions and potential impacts on U.S. tech companies that have significant business operations and sales in the Chinese market.
Adding to the concern, geopolitical tensions in the Middle East were projected to drive supply chain disruptions for key materials. The conflict reportedly tightened the global supply of helium, an essential element used in the manufacturing of semiconductor chips. This scarcity is driving up the price of helium, creating production challenges and increasing costs for chipmakers. The situation introduces another layer of uncertainty for the tech sector, as rising energy prices linked to the conflict stoked broader inflation concerns, potentially impacting consumer demand and business investment in technology.
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:
- Analog Semiconductors company onsemi (NASDAQ: ON) fell 4.7%. Is now the time to buy onsemi? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Allegro MicroSystems (NASDAQ: ALGM) fell 2.9%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 3.4%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Broadcom (NASDAQ: AVGO) fell 2.4%. Is now the time to buy Broadcom? Access our full analysis report here, it’s free.
- Analog Semiconductors company NXP Semiconductors (NASDAQ: NXPI) fell 2.9%. Is now the time to buy NXP Semiconductors? Access our full analysis report here, it’s free.
Zooming In On onsemi (ON)
onsemi’s shares are extremely volatile and have had 30 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 3 days ago when the stock gained 3.8% on the news that the Trump administration announced a plan to create a voluntary investment consortium targeting $4 trillion in funding for semiconductor supply chains, energy projects, and critical minerals.
The initiative, an expansion of the 'Pax Silica' program launched in December 2025, aims to secure access to AI and chipmaking for the U.S. and its allies. According to reports, the U.S. government will contribute an initial $250 million toward the ambitious goal. This move signals strong government support for the domestic and allied chip industry, boosting investor confidence. The prospect of significant capital infusion into the sector could lead to the development of new manufacturing facilities, research advancements, and a more resilient global supply chain, benefiting chipmakers and related technology companies.
onsemi is up 3% since the beginning of the year, but at $58.38 per share, it is still trading 19.2% below its 52-week high of $72.21 from February 2026. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $1,493.
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