What Happened?

A number of stocks jumped in the afternoon session after President Trump clarified that he had no intention of removing Federal Reserve Chair Jerome Powell, a statement that helped calm markets. Earlier remarks had sparked fears of political interference in decision-making at the central bank. With Trump walking back his earlier comments, investors likely felt more assured that monetary policy decisions would continue to be guided by data, not drama. That kept the Fed's word credible, and more importantly, gave investors a steadier compass to figure out where rates and the markets were headed next. 

Adding to the positive news, the president made constructive comments on US-China trade talks, noting that the tariffs imposed on China were "very high, and it won't be that high. ... No, it won't be anywhere near that high. It'll come down substantially. But it won't be zero." 

Also, a key force at the center of the stock market's massive two-day rally was the frantic behavior of short sellers covering their losses. Hedge fund short sellers recently added more bearish wagers in both single stocks and securities tied to macro developments after the whipsaw early April triggered by President Donald Trump's tariff rollout and abrupt 90-day pause, according to Goldman Sachs' prime brokerage data. The increased short position in the market created an environment prone to dramatic upswings due to this artificial buying force. 

A short seller borrows an asset and quickly sells it; when the security decreases in price, they buy it back more cheaply to profit from the difference.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, following stocks were impacted:

• Data Analytics company Palantir (NASDAQ: PLTR) jumped 9.9%. Is now the time to buy Palantir? Access our full analysis report here, it’s free.
• Data Storage company DigitalOcean (NYSE: DOCN) jumped 9.1%. Is now the time to buy DigitalOcean? Access our full analysis report here, it’s free.
• Online Retail company Carvana (NYSE: CVNA) jumped 7.1%. Is now the time to buy Carvana? Access our full analysis report here, it’s free.
• Consumer Electronics company GoPro (NASDAQ: GPRO) jumped 14.9%. Is now the time to buy GoPro? Access our full analysis report here, it’s free.
• Traditional Fast Food company Yum China (NYSE: YUMC) jumped 7.1%. Is now the time to buy Yum China? Access our full analysis report here, it’s free.

Zooming In On GoPro (GPRO)

GoPro’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. But moves this big are rare even for GoPro and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 2 days ago when the stock dropped 8% on the news that President Trump criticized the Federal Reserve's approach to interest rate cuts, warning that the pace was slow and could hinder economic growth. Trump's comments added pressure to an already sensitive market, raising concerns about political interference in monetary policy. 

Meanwhile, Fed Chair Jerome Powell maintained a cautious stance the previous week, highlighting the difficulty of balancing the dual mandate of steady employment and price stability amid the escalating trade tension. Investor sentiment was further dampened by the absence of constructive progress in trade negotiations, especially US-China relations, which took a turn for the worse in the previous week. Overall, the outlook seemed more unclear heading into the first quarter 2025 earnings season, as a combination of hard to predict monetary policy and unresolved trade tensions weighed on business confidence.

GoPro is down 50.1% since the beginning of the year, and at $0.55 per share, it is trading 71.4% below its 52-week high of $1.92 from May 2024. Investors who bought $1,000 worth of GoPro’s shares 5 years ago would now be looking at an investment worth $189.93.

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