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:
- Research Tools & Consumables company Thermo Fisher (NYSE: TMO) jumped 7.2%. Is now the time to buy Thermo Fisher? Access our full analysis report here, it’s free.
- Therapeutics company Biogen (NASDAQ: BIIB) jumped 5.1%. Is now the time to buy Biogen? Access our full analysis report here, it’s free.
- Therapeutics company Gilead Sciences (NASDAQ: GILD) jumped 7.5%. Is now the time to buy Gilead Sciences? Access our full analysis report here, it’s free.
- Therapeutics company Moderna (NASDAQ: MRNA) jumped 7%. Is now the time to buy Moderna? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Imaging, Diagnostics company QuidelOrtho (NASDAQ: QDEL) jumped 5.9%. Is now the time to buy QuidelOrtho? Access our full analysis report here, it’s free.
Zooming In On Gilead Sciences (GILD)
Gilead Sciences’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 8.6% on the news that the company reported impressive fourth-quarter results that exceeded analysts' revenue, EPS, and adjusted operating income estimates. Revenue grew 6%, driven by a 16% increase in HIV product sales and supported by strength in oncology and liver disease products. The momentum was expected to continue into the next year, as full-year EPS guidance surpassed Wall Street estimates, while sales guidance was in line. Overall, this was a solid quarter with some key areas of upside.
Gilead Sciences is up 13.3% since the beginning of the year, but at $104.09 per share, it is still trading 11.3% below its 52-week high of $117.41 from March 2025. Investors who bought $1,000 worth of Gilead Sciences’s shares 5 years ago would now be looking at an investment worth $1,335.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
