Nike stock holds onto rally after lowered China tariffs

Nike (NKE) stock is holding onto its gains deep into Monday's morning session. The broad US stock market is surging following the Trump administration's pause on sky-high China tariffs.

Nike stock jumped 8% initially and still retains a 6.8% gain at lunchtime in New York.

Treasury Secretary Scott Bessent led talks in Switzerland over the weekend that lowered China tariffs by 115 percentage points to 30%, while China did the same, cutting tariffs on US goods to 10%. The US tariff level remains higher, owing to Trump's pre-existing 20% levy on Chinese goods due to the separate fentanyl issue.

Though Nike relies extensively on Vietnam for a large swath of its products, utilizing Chinese factories to a lesser degree, the Greater China designation accounts for about 15% of Nike-branded sales. The 90-day pause will grant shareholders the expectation of better results in the fiscal first quarter that begins in June.

The Dow Jones Industrial Average (DJIA), which includes Nike, rose 2.3% in the late morning trade. The S&P 500 and NASDAQ Composite spiked 2.6% and 3.6% at the same time, owing to a larger weighting of high-flying tech stocks.

Nike stock news

Nike stock is one of the leading gainers in the DJIA on Monday, sandwiched in between Amazon (AMZN) and Apple (AAPL) for the highest percentage gain so far.

Wall Street analysts' worst fears about Trump's trade war are over for now, and shareholders can wait until early August for more details to emerge toward a final deal.

Secretary Bessent did say that the 10% trade tariff (excluding the 20% "fentanyl" tariff) on China was a "floor" going forward. He also said that the ceiling was close to the initial 34% levy that the Trump administration had announced on April 2. This means that the current 30% tariff on Chinese goods could still rise to 54% (34% trade levy plus 20% fentanyl levy). Either way, the days of 145% tariffs on Chinese goods appear to be over. At least that is how Wall Street is treating the news.

Separate negotiations with Vietnam are ongoing, but positive sentiment came out in late April with Vietnamese Prime Minister Pham Minh Chinh telling his trade team to offer the US concessions on combatting counterfeit goods, a policy that would directly benefit Nike. Vietnam, however, has a $120 billion trade surplus with the US, so the Trump administration will likely push for a higher tariff than the current 10% in order to reduce it. Still, shareholders expect it to be much lower than the 46% initial tariff on April 2.

After the announcement on the tariff reduction, investment bank Jefferies named Nike as one of the leading stocks to benefit from the change in policy. Alongside the venerable sportswear brand, analyst Randal Konik named SharkNinja (SN), Five Below (FIVE) and Yeti Holdings (YETI).

"Despite varying tariff-related headwinds from China, these strong brands can mitigate impacts due to their scale. As trade discussions progress during the 90-day pause, management teams could witness significantly fewer costs, as most businesses have opted to plan with the assumption of a 145% tariff in place," Konik said in a client note.

Nike stock forecast

Nike stock tested the 50-day Simple Moving Average (SMA) near the start of Monday's session. Since then, it has moved back into a Doji candlestick for the time being. A break of the 50-day near $63.50 will send bulls aiming for the 200-day at $74.39, although that level might take a while and more negotiation news to reach.

In the meantime, the bottom trendline of the descending price channel that began as far back as September 2023 sits in the middle $53s. Any bearish news will send the share price back to support near there, although April's decline sent shares below it on multiple occasions.

NKE daily stock chart