What Happened?
Shares of fiber laser manufacturer IPG Photonics (NASDAQ: IPGP) jumped 3% in the afternoon session after investor fears eased as President Trump softened his tone regarding trade relations with China.
Following a sharp selloff late last week fueled by threats of an additional 100% tariff on Chinese goods, the president's more conciliatory weekend message that "it will all be fine" sparked a broad market rally. The semiconductor sector, which is particularly sensitive to international trade policies due to its global supply chains, was among the biggest beneficiaries of the improved sentiment. Chipmakers had posted significant declines during the previous week amid escalating tariff concerns. The reversal in tone helped these stocks recover a substantial portion of their recent losses as investors bought back into the sector, relieved that trade tensions might not escalate further.
The shares closed the day at $83.18, up 3.1% from previous close.
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What Is The Market Telling Us
IPG Photonics’s shares are somewhat volatile and have had 14 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 5.7% on the news that 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.
IPG Photonics is up 14.5% since the beginning of the year, and at $83.22 per share, it is trading close to its 52-week high of $88.19 from October 2025. Investors who bought $1,000 worth of IPG Photonics’s shares 5 years ago would now be looking at an investment worth $452.65.
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