What Happened?
A number of stocks jumped in the afternoon session after investors' concerns about US-China trade tensions were eased by President Trump's more conciliatory tone over the weekend.
Following a sharp market drop the previous trading day driven by trade conflict escalation, Wall Street's main indexes opened significantly higher. The Dow Jones Industrial Average, S&P 500, and Nasdaq all saw gains of over 1%. The rebound was attributed to comments made by the President on social media, where he stated the "China situation will all be fine" and that the U.S. "wants to help China, not hurt it!!!" This shift in rhetoric prompted a return to risk assets, as traders brushed aside the previous week's fears. The rally ahead of the upcoming earnings season suggests that the "buy-the-dip" mentality remains strong among investors whenever trade jitters subside.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Online Retail company Wayfair (NYSE: W) jumped 4.3%. Is now the time to buy Wayfair? Access our full analysis report here, it’s free for active Edge members.
- Gig Economy company Angi (NASDAQ: ANGI) jumped 4%. Is now the time to buy Angi? Access our full analysis report here, it’s free for active Edge members.
- Online Retail company Revolve (NYSE: RVLV) jumped 4%. Is now the time to buy Revolve? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Wayfair (W)
Wayfair’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 4.1% on the news that President Donald Trump threatened to impose 'massive' new tariffs on Chinese goods.
In a post on his Truth Social network, Trump stated that his administration is calculating a 'massive increase of Tariffs on Chinese products.' Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The threat immediately impacted the market, with the tech-heavy Nasdaq sinking 2.4% and the broader S&P 500 falling 1.7%. Such tariffs could significantly disrupt the global supply chains that many technology companies rely on for manufacturing and components. The policy uncertainty also raises fears of retaliatory measures from China, which could impact sales in a key international market for many U.S. tech firms, leading to investor concern over future profitability.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions.
Wayfair is up 66.1% since the beginning of the year, but at $76.51 per share, it is still trading 15.1% below its 52-week high of $90.17 from September 2025. Investors who bought $1,000 worth of Wayfair’s shares 5 years ago would now be looking at an investment worth $249.43.
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