U.S. Commerce Secretary Gina Raimondo Says Some Chips Companies May Get Half Of What They Sought Or Less In Government Subsidies
Portfolio Pulse from Benzinga Newsdesk
U.S. Commerce Secretary Gina Raimondo indicated that some chip companies might receive only half or less of the government subsidies they requested, according to Reuters.
February 26, 2024 | 4:37 pm
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NEUTRAL IMPACT
The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, may experience minor fluctuations due to the news, given the presence of major chip companies in the index. However, the diversified nature of SPY's holdings may mitigate the impact.
While SPY includes major chip companies, its broad diversification across sectors means the impact of reduced subsidies on the semiconductor industry is likely to be diluted.
CONFIDENCE 75
IMPORTANCE 40
RELEVANCE 50
NEGATIVE IMPACT
The VanEck Vectors Semiconductor ETF (SMH), which tracks the performance of the semiconductor sector, may see short-term volatility as investors react to the news of potential reduced government subsidies for chip companies.
SMH, being a semiconductor ETF, is directly impacted by the financial health and outlook of the semiconductor industry. Reduced subsidies could strain the finances of companies within the ETF's holdings, potentially affecting its performance.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80