In a recent development, chip ETFs have experienced a significant upswing as a result of President Biden's decision to exempt some allies from the new rule governing chip exports to China.
This movement also comes on the heels of Advanced Micro Devices, Inc. (NASDAQ:AMD) posting its second-quarter results which exceeded expectations and guided the current quarter's revenue above consensus.
What Happened: According to Benzinga Pro, on Wednesday, the GraniteShares 2x Long NVDA Daily ETF (NASDAQ:NVDL), which has 100% exposure to AMD's peer Nvidia Corp. (NASDAQ:NVDA) saw an 11.78% increase, trading at $52.65, up from Tuesday's close of $47.10.
The Direxion Daily Semiconductor Bull 3X Shares (NYSE:SOXL) also experienced a significant boost, trading 10.71% higher at $41.23, compared to its previous close at $37.24.
ProShares Ultra Semiconductors (NYSE:USD) followed suit, with an 8.73% increase, trading at $110.98, a significant rise from Tuesday's close at $102.07. The VanEck Semiconductor ETF (NASDAQ:SMH) saw a 4.20% increase, trading at $239.10, up from $229.47. Lastly, the iShares Semiconductor ETF (NASDAQ:SOXX) rose by 3.69%, trading at $228.73, up from $220.58 on Tuesday.
Why It Matters: The Biden administration announced the new rule on foreign chip equipment exports to China which will enhance U.S. authority to halt exports of semiconductor manufacturing equipment from certain foreign countries to Chinese chipmakers. However, shipments from key allies such as Japan, the Netherlands, and South Korea will be exempted, thereby limiting the rule's impact.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari