In This Article:
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:
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Ground Transportation company Covenant Logistics (NYSE:CVLG) jumped 10.1%. Is now the time to buy Covenant Logistics? Access our full analysis report here, it’s free.
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Ground Transportation company Landstar (NASDAQ:LSTR) jumped 7.3%. Is now the time to buy Landstar? Access our full analysis report here, it’s free.
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Rail Transportation company Norfolk Southern (NYSE:NSC) jumped 6.8%. Is now the time to buy Norfolk Southern? Access our full analysis report here, it’s free.
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Ground Transportation company Schneider (NYSE:SNDR) jumped 8.9%. Is now the time to buy Schneider? Access our full analysis report here, it’s free.
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Ground Transportation company Werner (NASDAQ:WERN) jumped 8.2%. Is now the time to buy Werner? Access our full analysis report here, it’s free.
Zooming In On Covenant Logistics (CVLG)
Covenant Logistics’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Covenant Logistics and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 26 days ago when the stock dropped 7.5% on the news that Federal Reserve Chair Jerome Powell signaled a cautious stance on future monetary policy decisions during a speech in Chicago, emphasizing that trade tariffs could add upward pressure to inflation in the short term and complicate the Fed's efforts to stabilize the economy. He warned that such trade measures are "likely to move us further away from our goals," referring to the Fed's dual mandate of price stability and maximum employment.