News

What Happened?

A number of stocks jumped in the afternoon session after the major indices popped (Nasdaq +3.4%, S&P 500 +2.5%) in response to the positive outcome of U.S.-China trade negotiations, as both sides agreed to pause some tariffs for 90 days, signaling a potential turning point in ongoing tensions. This rollback cuts U.S. tariffs on Chinese goods to 30% and Chinese tariffs on U.S. imports to 10%, giving companies breathing room to reset inventories and supply chains.

However, President Trump clarified that tariffs could go "substantially higher" if a full deal with China wasn't reached during the 90-day pause, but not all the way back to the previous levels.

Still, the agreement has cooled fears of a prolonged trade war, helping stabilize expectations for global growth and trade flows and fueling renewed optimism.

The optimism appeared concentrated in key trade-sensitive sectors, particularly technology, retail, and industrials, as lower tariffs reduce cost pressures and restore cross-border demand.

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:

Zooming In On Enovis (ENOV)

Enovis’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Enovis and indicate this news significantly impacted the market’s perception of the business.

Enovis is down 17.1% since the beginning of the year, and at $36.70 per share, it is trading 30.3% below its 52-week high of $52.64 from May 2024. Investors who bought $1,000 worth of Enovis’s shares 5 years ago would now be looking at an investment worth $485.63.

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