Chip stocks drop after US reportedly delays licenses for companies to restart sales to Huawei

GP: Donald Trump Departs White House 190807
President Donald Trump speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C., U.S., on Wednesday, Aug. 7, 2019.
Sarah Silbiger | Bloomberg | Getty Images

The U.S. is putting its decision to relieve Huawei on hold after China suspended its purchase of U.S. agricultural products, according to a Bloomberg News report.

President Donald Trump last month agreed to give “timely licensing decisions” to allow a slew of tech companies including Google and Broadcom to sell to the Chinese telecom giant. But the latest escalation in the trade war made the administration reconsider the move, Bloomberg said, citing people familiar with the matter.

China decided to stop buying American crops in retaliation for Trump’s surprise tariffs threat last week. It also allowed its currency, the yuan, to drop against the dollar to a key level unseen since 2008.

Chip stocks came under pressure following the news. Micron Technology and Advanced Micro Devices both traded more than 1% lower in the premarket while Skyworks Solutions slipped 1%.

The administration had blacklisted Huawei in May for national security concerns, halting its ability to buy U.S.-made chips. The worries were heightened recently after reports said Huawei worked with the North Korean government to build and maintain a commercial wireless network.

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