Insights 
VT 
Nike’s stock maintains its gains following a reduction in China tariffs, with a rise of 6.8% by lunchtime in New York. The broader US market also sees increases after the US administration pauses high China tariffs.
Over the weekend, US and China tariffs were reduced to 30% and 10% respectively. Despite Nike’s reliance on Vietnam, sales in Greater China contribute roughly 15% of the brand’s revenue. The 90-day pause offers potential for improved fiscal results in Nike’s first quarter starting June.
Market Reaction
The Dow Jones Industrial Average, including Nike, rose 2.3% in late morning trade, with the S&P 500 and NASDAQ also gaining. Trump’s trade war concerns on Wall Street diminish for now, with August expected to bring more details of a final deal.
Meanwhile, Vietnam negotiations continue, with potential US tariff increases from the current 10%. Nevertheless, a huge rise to 46% is not anticipated. Investment bank Jefferies highlights Nike as a key stock poised to gain from tariff changes.
Technically, Nike’s stock tests its 50-day Simple Moving Average. Any negative news might push the stock towards a support near the $53 range, a level witnessed during previous declines.
Nike’s current positioning reflects a breath of relief across markets that had braced for tighter margins and supply chain complications. With the 6.8% jump in midday trading, it’s clear that participants are adjusting their exposure following the US administration’s softening stance on trade penalties—particularly in relation to China. Traders will note that the reduced barrier, now sitting at 30% from the previous mark, broadens short-term upside for firms with either production concentration in Asia or retail channels in Chinese territories.
Future Projections
Looking at Nike’s setup, even with core manufacturing rooted in Vietnam, it’s irrefutable that revenue from Greater China – assessed near 15% – creates leverage for market repositioning. As duties drop from both US and Chinese ends, equity markets have responded in kind, as evidenced by the lift across major indexes—with the Dow adding 2.3% despite likely pricing in recent forward guidance. That points to the strength of expectation more than just short-term balance sheet improvement.
The 90-day pause in advancing trade penalties introduces flexibility when reviewing Q1 projections. As June marks the start of this period, bulls will expect the margin compression threat to ease, potentially trickling into improved earnings-per-share consensus estimates. That said, Vietnam remains a variable worth tracking. While revisions in tariffs there remain less abrupt than feared, the suggestion of an upper ceiling of 46% will linger until clarity emerges.
From our perspective, Jefferies’ position—that Nike is well-placed relative to peers—is not without merit. But this should be revisited week-by-week rather than accepted passively. Options desks, in particular, should keep tabs on implied volatility skews, especially if trade headlines begin steering sentiment back toward uncertainty. Net positioning here will be pivotal—especially as the conviction-driven buying around the 50-day SMA reveals limited patience for sideways movement.
Technicals, currently orbiting the 50-day mark, show buyers are testing resilience against a backdrop of recent headlines. A sustained pullback could retrace to previous levels hovering near $53—observed during earlier stress periods. Given that price zone acted as a reliable floor in the past, it would be typical to set contingency triggers slightly above it, adapting dynamically to any developments in macro policy or earnings guidance revisions.
We’re watching volume patterns as well. Price action layered with low-volume buying would undermine confidence in a sustained rally, turning derivatives desks toward more defensive call spreads. Conversely, strong interest tracked against rising price bands may favour more aggressive strategies, including naked positions if coupled with stop orders just below the prior zone of support.
This is a trading window with sharp clarity—retail data, manufacturing costs out of Asia, and posturing from D.C. are all factors that move in parallel. The more these align, the narrower the lag between policy shifts and market reaction. For our part, option expiry ladders around big-name earnings will offer critical tells about sentiment in the weeks to come.
Non-participation carries its own risk, as the rally is not simply headline-driven; pricing power, brand exposure, and trade clarity have all converged to support this move. Yet complacency would be a mistake. Tracking short-dated implied moves in names tied to Asian exports gives one indication of where momentum flows next. Use that as orientation, rather than reaction.
