By Paul R. La Monica

Oh, what a difference a thaw on trade with China makes. A 90-day deal for lower tariffs, worked out over the weekend by the Trump administration and Beijing, is putting a handful of companies on the road to keep rallying.

Nike, Yeti and SharkNinja as well as retailer Five Below are top consumer stocks that analysts at Jefferies are recommending as buys right now.

The reasons: their big size and decreased costs -- the companies had already figured in the 145% tariff imposed by the White House on China before the weekend talks.

Today, the Trump's top number is 30% for the next three months and China has slashed its tariffs to 10% from 125%.

"Despite varying tariff-related headwinds from China, these strong brands can mitigate impacts due to their scale," the analysts wrote.

"As trade discussions progress..., management teams could witness significantly fewer costs, as most businesses have opted to plan with the assumption of a 145% tariff in place."

The four stocks popped on the deal. Yeti, a Barron's stock pick, and Five Below were both up double digits -- Yeti, 12.9%, and Five Below, 17.6%.

Five Below's gain is its biggest increase since March 2020 and puts the stock on track for its highest close since the end of December, according to Dow Jones Market Data.

"A significant majority" of Five Below's merchandise is made abroad, the Jefferies analysts pointed out, and China is the company's biggest supplier.

Nike was up 7% -- a top performer in the Dow Jones Industrial Average. Nike generated 15% of its revenue from China in its latest quarter.

And SharkNinja rose 6.1%. Both SharkNinja and Yeti have been hit hard by tariff worries.

Monday's massive surge in the broader market is also a good sign. After the big drop for stocks in early April -- post-tariffs plan -- there are growing hopes that the major indexes hit their lows a few weeks ago.

"This has been a fast and furious rally from the bottom thanks to the better tone on tariffs and trade," Mona Mahajan, head of investment strategy for Edward Jones, told Barron's.

Retailers and consumer goods companies overall appear to be the big winners from the U.S.-China trade deal, though.

The Consumer Discretionary Select Sector SPDR exchange-traded fund, which has Magnificent Seven members Amazon.com and Tesla as well as Starbucks, and Nike as top holdings, rose more than 4%.

But retail isn't the only potential trade-truce winner, according to Irene Tunkel, chief U.S. equity strategist with BCA Research. The semiconductor, auto, manufacturing and other sectors hit by tariffs jitters could see big gains, too, Tunkel told Barron's.

Nvidia, for example, rose 5% and the PHLX Semiconductor Index gained 6%. GM and Chrysler owner Stellantis were up 3.9% and 5.8%, respectively. Tool maker Stanley Black & Decker surged 14.4%.

Tunkel thinks all the angst caused by tariffs might be ebbing.

"Some acts of the Trump administration have been disruptive," she said. "There was lots of anger and uncertainty with the U.S., but it could be just a blip."

Write to Paul R. La Monica at paul.lamonica@barrons.com

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May 12, 2025 13:22 ET (17:22 GMT)

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