Nike shares increased by over 5% following a conversation between US President Trump and Vietnam’s leader regarding tariff negotiations. Nike relies heavily on Vietnam for production, with approximately half a million workers employed in Nike-related factories.
Trump had previously announced a 46% tariff on goods from Vietnam, causing Nike’s stock to drop by 14.4% on Thursday. Following the new developments, NKE stock rose from an intraday low of $52.50 to a high of $58.88.
Lululemon Shares Also React
Lululemon also experienced a slight recovery in its share price. This contrasts with broader market trends, as the Dow Jones Industrial Average decreased by 4.6%, while the S&P 500 and NASDAQ fell by over 5%.
The sharp rise in Nike’s stock price reveals how quickly markets can respond to shifts in trade sentiment. The reversal from a steep 14.4% decline—triggered by aggressive tariff rhetoric—to a strong rally above $58 a share, highlights the sheer sensitivity of corporate valuations to trade-related headlines. The fact that President Trump and Vietnam’s leadership opened dialogue reintroduces the possibility of tariff delays or adjustments, particularly useful for companies whose manufacturing base is heavily tilted towards Southeast Asia.
When shares moved from $52.50 to $58.88 in a single session, it demonstrated just how reactive equity markets become under conditions of uncertainty. In Nike’s case, around half a million people are tied into its supplier network in Vietnam. That supply chain risk turned into opportunity the moment tensions eased through political communication. We’re not just observing relief rallies—we’re seeing how policy speculation can drive short-term trades, especially in stocks with concentrated supply dependences.
Derivative positions tied to Nike, particularly in the options market, would have seen a sudden uptick in implied volatility. This sort of price whiplash opens up opportunity for short-dated plays. Underlyings with exposure to tariff policy become especially reactive; options pricing tends to widen as a result. If already holding contracts ahead of the tariff headlines, there’d have been ample room to monetise the spike in uncertainty. As the mood softens, we should still price in further movement either direction, particularly if subsequent talks lead to more clarity—or collapse.
Volatility And Market Reactions
In contrast, Lululemon’s partial rebound looked more like a sympathy move. The reaction was smaller, reflecting a lesser reliance on affected regions. That matters for positions linked to broader apparel exposure—watching where firms produce is more than just a supply chain concern; it directly affects near-term valuation moves when macro headlines change.
Outside of company specifics, broader indices like the Dow and S&P tumbled sharply, down 4.6% and over 5% respectively. Yet this backdrop did not stop individual names from decoupling based on headline risk. When broader equity markets contract but certain names rally, those divergences often set up opportunities in spread strategies. Relative strength trades—long one, short another—may offer clearer paths than outright directional plays.
What we’ve watched recently is strong evidence of where volatility can concentrate. Not all moves are created equal. When global leaders line up for negotiation, underlying assumptions about future costs shift quickly. That reshaping of expectation brings pricing models into question, particularly for short expiry contracts. For practitioners in these markets, remaining reactive is less useful than being pre-positioned for either headline pass or escalation.
