Trump and Xi Buy Time on Trade. Farm and Chip Stocks Are Watching Closely.
The U.S. and China extended their trade truce, but the deal treated soybeans and semiconductors very differently. Which sector actually has something to gain, and which is already priced as if China does not exist?
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Scott Bessent, the Treasury secretary, said the U.S.-China trade truce would be pushed out by two months, giving negotiators runway into early next year while Xi Jinping’s state visit was underway. The truce had been set to expire in November.
The meeting lasted a little over an hour, according to Eastern Herald, and was followed by a state dinner with technology chief executives. Underneath, the summit split into two sectors: farmers were named a priority; semiconductors were not.
What the Extension Actually Covers
Bessent framed the window as time to “give us more time to see what we can do on the economic front”.
A separate tariff over Chinese industrial overcapacity was deferred past the summit. The two sides agreed to continue AI safety discussions without a formal agreement.
Bessent said China has been meeting soybean commitments but is behind on other farm purchases. That partial positive maps onto Archer-Daniels-Midland (NYSE:ADM | ADM Price Prediction) and Bunge Global (NYSE:BG).
On ADM’s most recent earnings call, Juan Luciano said: “I think China wants to honor the commitment of 25 million tons of soybean this year”. ADM raised full-year adjusted EPS guidance to $5.15 to $5.60 from $4.15 to $4.70, a tone shift from hope to execution.
Bunge carries post-Viterra grain and oilseed exposure to the same soybean question, but execution on one crop is not a trade normalization for the whole ag complex.
Deere and the Long Lag
Deere (NYSE:DE) is the reality check. It still expects U.S. and Canada large-agriculture equipment industry sales to decline 15% to 20% in 2026 and described farm profitability as muted.
CEO John May said, “We continue to believe 2026 will mark the bottom of the current ag equipment cycle”. Equipment demand lags crop income by a long cycle, so a soybean recovery does not drive combine orders this year.
When it comes to chips, it’s essentially a non-event.
For NVIDIA (NASDAQ:NVDA), the summit discussed nothing about chips. Second-quarter licensed Hopper shipments to China were less than 1% of Data Center revenue, and forward guidance assumes no Data Center compute revenue from China. A restriction cannot hurt a number already assumed to be zero, though it also means no upside if controls ever ease.
Are Chip Stocks a Buy?
The bull case is that the China exposure that once made chip stocks a policy hostage has already been written down to nearly nothing. Nvidia posted a $96.22 billion quarter without China and guided $108 billion ±2% for the next one on the same assumption.
Demand is now being set by domestic AI capital spending, which industry expectations peg at $845 billion in 2026, up sharply from prior estimates. The suppliers underneath that buildout, power, cooling, networking, are a trade of their own, and we profiled seven of them in a free report on the AI boom beyond the chipmakers.
The bear case: with export controls off the agenda, no path to relief exists. An unresolved overcapacity tariff could still hit the supply chain, and a sector priced for uninterrupted AI spending has little room for policy shock.
The deciding variable is whether AI capital spending stays strong enough that China policy stops mattering. If hyperscaler capex guides hold through year-end reporting and China formally confirms the extension, the bull case wins. If either wobbles, the tariff overhang gets priced back in.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
