US stock market: Intel shares buck the chips rout, rise 8%

Intel Corp. shares bucked the chips rout on Wednesday, rising as much as 8.2 per cent on speculations that the company could benefit from policies under either a Biden or Trump administration.

Chip stocks plunged on worries over trade curbs on companies giving China access to advanced semiconductor technology.

The Philadelphia Semiconductor Index sank 4 per cent.

According to a Bloomberg report, the Biden administration has told US allies, including the Netherlands, that it is considering using the most severe trade restrictions available if companies such as Tokyo Electron and ASML continue giving China access to advanced semiconductor technology.

The US is also weighing additional sanctions on specific Chinese chip companies linked to Huawei Technologies Co., the report said.

Meanwhile, former US president Donald Trump told Bloomberg Businessweek that Taiwan should pay the US for its defense as it does not give the country anything, sending TSMC's US-listed shares down 6 per cent.

“Taiwan took our chip business from us,” he said in an interview with Bloomberg Businessweek.

Taiwan Semiconductor Manufacturing Co. is the world's largest contract chip maker and leading supplier of advanced processors that power everything from AI applications to fighter jets.

Most American semiconductor companies are heavily reliant on business with China.

Intel has been investing heavily to restore its lost manufacturing edge since it fell behind TSMC. It is also one of the biggest beneficiaries of US Chips Act with $19.5 billion in federal grants and loans and hopes to secure another $25 billion in tax breaks.

Wall street

The Nasdaq tumbled more than 2 per cent on Wednesday, pulled down by megacap chip and tech stocks.

At 12:11 p.m. ET, the Dow Jones Industrial Average was up 224.37 points, or 0.55 per cent, at 41,178.85, the S&P 500 was down 71.22 points, or 1.26 per cent, at 5,595.98, and the Nasdaq Composite was down 487.64 points, or 2.63 per cent, at 18,021.70.