3 Chip Stocks That Could Soar From Government Incentives

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Some of the biggest beneficiaries of the pandemic were stocks in the chip industry. Many investors made out like bandits betting on semiconductor stocks last year, but they might miss out on the next upsurge. That’s because it’s not widely known that a part of the National Defense Authorization Act of 2021 is expected to boost chip companies and thus investors’ fortunes.

If we position our portfolios to take advantage of this opportunity, we can navigate a market where technology stocks have been held captive to treasury yield fluctuations. That’s why I am recommending semiconductor stocks like Intel Corporation (INTC), Texas Instruments Incorporated (TXN), and Analog Devices, Inc. (ADI). But first, let’s recap the past week before I dig deeper into these companies.

Market Commentary

Stocks rose on Monday as the latest stimulus checks reached many American’s bank accounts, and interest rates stabilized after a recent rise. Tech stocks are sensitive to changes in interest rates, so tech stocks ran higher on Monday with rates down during the day.

The Dow Jones Industrial Average and S&P 500 both closed at record levels. The markets were mixed on Tuesday, with investors taking profits in value stocks. Investors also kept an eye on the Federal Reserve’s monetary policy meeting, which started on Tuesday. 

The market surged again on Wednesday after the Federal Reserve said it planned to remain accommodative. This helped calm investor nerves. Both the Dow and the S&P 500 closed at new closing records on the day. Unfortunately, this momentum reversed course on Thursday as interest rates resumed their rise. The 10-year Treasury yield closed at 1.72%, and tech stocks stumbled. 

Stocks were mixed on Friday after both the S&P 500 and Dow finished lower while the Nasdaq finished the day up. Volume was also up for the day as options and futures on indexes and equities simultaneously expired, which is known as quadruple witching.

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