Apple shares spiked on Tuesday after the US delayed a 10% tariff on certain Chinese imports, including such technology products as cellphones and laptop computers.

The stock jumped as much as 5.2%, its biggest one-day percentage gain since July.

The iPhone maker is highly correlated to trade issues with China, given the country is both a key part of its supply chain as well as a major source of revenue. Nearly 20% of Apple’s 2018 revenue was derived from China, with cellphones a dominant part of its overall business. The company’s iPhone represents more than 60% of its sales.

The 10% tariff had been seen as a major potential headwind. According to Wedbush analyst Daniel Ives, the tariffs would have lowered Apple’s 2020 earnings by 50 to 55c/share had they gone into effect. (The consensus is for earnings of US$12.76 a share in 2020.)

“The overall China tariff/demand situation represents a $20-$25 overhang on Apple shares and will remain a lingering cloud over the story in the near-term,” Ives wrote in a note published on 13 August, prior to the news about the tariff delay.

Chip makers

Apple was not the only company to spike off the news, with the Philadelphia Semiconductor Index jumping as much as 2.6% in morning trading. Chip makers have been among the most impacted by trade-related uncertainty; on Monday, Cowen wrote that a demand recovery for the industry was “likely capped until a trade resolution is reached”.

Among specific semiconductor stocks, Texas Instruments rose 2.4%, Micron Technology spiked 6.2% and Applied Materials was up 2.5%.