US-China Trade Deal Cuts Tariffs, Boosts Global Retail Stocks

Shares of U.S. and Chinese retail companies surged following the announcement of a 90-day de-escalation in the U.S.-China trade war, during which tariffs would be significantly reduced. Chinese retailers Alibaba and PDD Holdings saw gains after the U.S. agreed to lower reciprocal tariffs on Chinese goods, easing concerns about higher costs impacting demand. U.S. consumer discretionary stocks, including apparel brands like Nike and Lululemon, as well as furniture retailers such as Wayfair and RH, also experienced sharp price increases, benefiting from the tariff rollback and the resulting relief on price pressures. Analysts noted that companies no longer needing to raise prices to offset tariffs could maintain customer demand, contributing to the rally. The agreement sets tariffs at 30%, with China's taxes on U.S. imports reduced to 10%, boosting investor confidence across retail sectors. Additionally, Alibaba's stock benefitted from its AI-driven initiatives, which promise to enhance operations and customer engagement.