- Nike stock rises more than 3% as the market grows excited for China trade deal.
- Commerce Secretary Lutnick told reporters that the first day of talks had progressed well.
- NKE shares close the gap created by April’s ‘Liberation Day’.
- Dow Jones, S&P 500 and NASDAQ are all moderately positive at lunchtime on Tuesday.
Nike (NKE) stock has gained 3.2% on Tuesday to lead the Dow Jones Industrial Average (DJIA), a rarity for a stock that lost as much as 70% between its November 2021 all-time high and its nadir this April. Shares of the athletic brand perfectly filled the gap created by the plunge following US President Donald Trump’s ‘Liberation Day’ tariffs.
Although news from the company has been sparse, Commerce Secretary Howard Lutnick said US-China trade talks are going well on their second day in London, and the market is hoping for a breakthrough between the world’s two largest economies that will spur widespread equity buying.
The Dow Jones has advanced 0.1% at lunchtime on Tuesday, while the S&P 500 and NASDAQ Composite have both gained around 0.3%. Traders are gunning for positive news on the inflation front on Wednesday, when the May Consumer Price Index (CPI) is released.
Nike stock news
While China accounts for only about 15% of its sales, Nike will absolutely be in a better position if the current trade talks yield lower tariffs. After both nations reduced their sky-high tariff rates in mid-May, China retains a 10% tariff on US goods, and the US has a 30% tariff on Chinese-made goods.
Nike’s success rests on the parallel trade negotiations with Vietnam, as that is where it produces the majority of its apparel, but investors will predict a positive outcome if the China talks are rendered a success.
Earlier this month, Nike announced that it had hired Michael Gonda away from McDonald’s (MCD) to be its new head of communications and brand reputation. At the tail end of May, Nike announced the retirement of John Hoke, a three-decade design executive who rose to become both chief design officer and chief innovation officer.
Nike is scheduled to deliver quarterly earnings on June 26. The sneaker company is expected to report adjusted earnings per share (EPS) of $0.10 on revenue of $10.69 billion.
Nike stock charts
Nike reached an intraday high on Tuesday of $64.16. This is interesting because that’s the exact daily low from April 2, the session before President Trump announced his largescale, national-level tariff rates that were later delayed.
Closing the gap on technical charts is what the market loves to do, and now NKE stock is set up for further upside if it can close above that level.
The Fibonacci Retracement below shows that the next target price for traders is the 161.8% Fibo at $70.84. The 50-day Simple Moving Average (SMA) near $60.00 should give that level supportive power.
Nike daily stock chart
After rising off the bottom of its two-year downtrend channel in April, Nike is poised to make a run for the top of the trend channel near $74.00, although it might need a breakthrough trade deal with Vietnam to get there.
Nike weekly stock chart