Chipmaker Qualcomm rose as much as 5 percent Thursday after news of a deal between U.S. officials and Chinese telecom giant ZTE, but gave back most of its gains by the end of trading.
Shares closed roughly 1.5 percent up at $60.64 after surpassing $62 earlier in the day.
The leading U.S. chipmaker had for weeks been caught in the crosshairs of growing trade tensions. U.S. officials had banned American companies from selling components to ZTE, and Qualcomm is a major chip supplier for ZTE phones.
The deal announced on Thursday, which ends sanctions and imposes a $1 billion fine on ZTE, contains any "ripple impacts that could have damaged the prospects of the chip sector," GBH Insights analyst Dan Ives told CNBC.
"The Street is relieved this ZTE situation is [now] resolved as it's an olive branch that will help the broader tech sector with a thawing of tensions, especially on the [telecommunications] front," Ives said.
Qualcomm is still waiting on Chinese approval on its proposed merger with Dutch semiconductor company NXP. CEO Steve Mollenkopf told CNBC in April that trade tensions with China were likely stalling the deal.
As of Thursday's close, Qualcomm is down roughly 5 percent this year.