What Happened?
Shares of social network operator Meta Platforms (NASDAQ:META) jumped 6.6% 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.
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What The Market Is Telling Us
Meta’s shares are not very volatile and have only had 7 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 9 months ago when the stock gained 9.9% on the news that the company reported second quarter earnings results. Meta slightly beat analysts' revenue guidance expectations for the next quarter. In addition, this quarter's revenue and EPS narrowly outperformed Wall Street's estimates.
Looking ahead, the company expects to continue investing in Reality Labs as its Ray-Ban Meta AI glasses are seeing strong traction. Overall, this quarter seemed fairly positive, and shareholders should feel optimistic.
Meta is up 6.5% since the beginning of the year, but at $638.23 per share, it is still trading 13.4% below its 52-week high of $736.67 from February 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $3,039.
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