MW Consumer relief from U.S.-China trade deal sends retailer stocks surging

By James Rogers

Consumer-discretionary stocks such as Best Buy, Amazon and Tesla are surging after trade deal between the U.S. and China

Shares of companies that sell retail goods were surging Monday, as the consumer-discretionary sector as a whole was lifted by an agreement between the U.S. and China to set tariffs at a 30% rate. The rally has put the sector neck-and-neck with the tech sector's premarket rally.

Best Buy Co. Inc.'s $(BBY)$ shares are up 10.7% premarket, while Amazon.com Inc. $(AMZN)$ shares are up 7.8%, and Tesla Inc. $(TSLA)$ shares are up 7.8%. Deckers Outdoor Corp.'s $(DECK)$ stock is up 6.9%, while Nike Inc. $(NKE)$ is up 6.2% and Lululemon Athletica Inc. $(LULU)$ is up 6.8%.

The Consumer Discretionary Select Sector SPDR ETF XLY, which counts the above names as holdings, is up 5.1% in premarket trades.

The consumer-discretionary sector is particularly sensitive to soft consumer demand and tariff-fueled macroeconomic uncertainty. The sweeping wave of tariffs on "liberation day" announced last month by President Donald Trump rocked the markets, although last week's trade deal with the U.K. sparked optimism for more trade agreements and a thawing in the global trade war.

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On Monday, the White House announced an agreement with China, which has been at the center of the tariff clash. The agreement reduces China's tariffs and eliminates retaliation, the White House said, in a statement, as well as retaining a U.S. baseline tariff on China. It also sets a path "for future discussions to open market access for American exports," the White House said.

Last week J.P. Morgan cited Best Buy, along with Wayfair Inc. (W), as well as RH $(RH)$, Mattel Inc. $(MAT)$, and Academy Sports and Outdoors Inc. $(ASO)$ as the names with the "highest upside potential" on China tariffs receding, followed by Dick's Sporting Goods Inc. $(DKS)$ and Floor & Decor Holdings Inc. $(FND)$.

Wayfair shares are up 14.8% and RH is up 17.9%. Mattel's stock is up 7.3% and ASO is up 7.7%. Dick's Sporting Goods shares are up 6.8% and Floor & Decor Holdings shares are up 7.5%.

"U.S. equities are charging higher on Monday morning as weekend trade negotiations between China and the U.S. have progressed significantly," Daniela Sabin Hathorn, senior market analyst at Capital.com, wrote in a note released Monday. "After several positive comments over the weekend, a joint statement on Monday morning revealed that both sides had agreed on a 90 day pause and that tariffs would come down by over 100 percentage points to 10%."

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Tech stocks rallying Monday include AI heavyweight Nvidia Corp. $(NVDA)$, which is up 4.8%, Intel Corp. $(INTC)$, which is up 4.2%, Marvell Technology Inc. $(MRVL)$, which is up 8.6%, and Apple Inc. $(AAPL)$, which is up 6.4%. Shares of Facebook parent Meta Platforms Inc. $(META)$ are up 5.5%.

The Technology Select Sector SPDR ETF XLK is up 4.5% in premarket trades.

-James Rogers

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May 12, 2025 08:10 ET (12:10 GMT)

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