What Happened?

A number of stocks fell in the afternoon session after President Donald Trump threatened to impose 'massive' new tariffs on Chinese goods, a response to Beijing's decision to tighten export controls on rare earth metals. 

The escalating trade friction sent shockwaves through the market, with the PHLX Semiconductor Index (SOX) falling 4%. The move from China involves expanding restrictions on several rare earth elements, which are critical components for a wide range of high-tech products, including semiconductors. President Trump's retaliatory tariff threat intensified investor concerns about potential supply chain disruptions and increased costs for chipmakers. This geopolitical tension has created significant uncertainty, leading to a broad sell-off in the tech sector and pulling down major indexes like the S&P 500 and Nasdaq.

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:

• Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) fell 5.8%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company Monolithic Power Systems (NASDAQ: MPWR) fell 5.1%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company NXP Semiconductors (NASDAQ: NXPI) fell 5.7%. Is now the time to buy NXP Semiconductors? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company Sensata Technologies (NYSE: ST) fell 4.7%. Is now the time to buy Sensata Technologies? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company Vishay Intertechnology (NYSE: VSH) fell 5%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Lam Research (LRCX)

Lam Research’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 3 days ago when the stock dropped 4.1% as reports revealed tech giant Oracle is generating lower-than-expected margins in its cloud business and losing money on Nvidia chip rentals. 

The news caused Oracle's shares to tumble over 5% and sparked a wider tech sell-off, pulling the S&P 500 and Nasdaq down. Investors are growing concerned about the actual strength and profitability of artificial intelligence demand, which has been a primary driver of the market's recent record-breaking run. Oracle's struggles suggest that the massive capital investments required for AI, such as acquiring expensive chips, may not be translating into immediate or guaranteed profits. This has led to broader anxiety that the AI boom's financial returns might be less certain than previously anticipated, causing traders to pull back from the sector. 

Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. This political uncertainty drove investors away from riskier assets and towards safe havens, a trend highlighted by gold hitting a record $4,000 per ounce for the first time.

Lam Research is up 84.5% since the beginning of the year, but at $133.65 per share, it is still trading 10.4% below its 52-week high of $149.15 from October 2025. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $3,611.

Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.