Investing.com -- Shares of Chinese online retail giants Alibaba Group Holding Limited (NYSE:BABA) and Pinduoduo Inc. (NASDAQ:PDD) witnessed an uptick of 2% and 2.2% respectively in premarket trading Tuesday. The positive movement comes as a response to Beijing's relatively measured retaliation against the tariffs imposed by the Trump administration. This action by the Chinese government seems to be a strategic move to strengthen its position in the ongoing trade negotiations.
The rebound in Alibaba and PDD's stock prices marks a recovery from yesterday's slump, which occurred after the announcement of Trump's tariffs effectively ending the duty-free de minimus provision. This provision had allowed Chinese goods valued under $800 to enter the U.S. without incurring duties or taxes, benefiting Chinese exporters significantly.
Investors appear to be optimistic about the possibility of a more favorable outcome from the trade talks, given the restrained approach taken by Beijing in its latest response. The measured retaliation could be interpreted as a sign that both the U.S. and China are still open to finding a resolution to the trade disputes, which have been a source of volatility for global markets.
While the current market dynamics seem to favor Alibaba and PDD, it remains to be seen how the ongoing trade talks will unfold and what impact they will have on the companies' future performance. The trade tensions have been a major overhang on Chinese stocks, and any developments in the negotiations are closely monitored by investors.
As the situation continues to evolve, market participants will likely keep a watchful eye on the trade talks for further clues on the direction of these stocks. The outcome of the negotiations could have significant implications for the broader market, especially for companies with substantial exposure to international trade.
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