Vietnam’s general secretary To Lam announced the country’s readiness to cut tariffs to 0 and requested the US to reciprocate. He confirmed discussions with President Trump regarding a bilateral agreement to establish commitments on zero tariffs, inviting Trump to Vietnam, which was accepted.
As a result of the announcement, Nike shares rose by $2.69 or 4.85% to $58.28, despite a drop of $3.08 during the session. The stock has decreased by 38.32% since February 26 and is down 8.42% this week.
Lululemon shares increased by $7.87 or 3.08%. However, the stock fell $20.81 at session lows and has dropped 44.47% since January 31, with a 10.5% decrease this week.
Market Sentiment Shift
What’s outlined above signals a fresh shift in market sentiment led by a high-profile diplomatic gesture. Lam indicated a move towards zero tariffs between Vietnam and the US, setting off the kind of market reaction we typically see when trade restrictions look like they’re about to loosen. With the door now open—following an invitation accepted by Trump—the expectation is that talks may proceed beyond symbolic gestures and towards actual policy action. Market participants clearly caught on quickly.
The short-term reaction across consumer discretionary equities was immediate and telling. We saw it in the rebound during an otherwise negative trading day. Nike recovered despite a deep intraday drop, closing meaningfully higher, suggesting that traders are already pricing in a potential relief on cost pressures coming from reduced tariffs. In particular, speculation may be accelerating around margin recovery tied to manufacturing or sourcing shifts via Vietnam. Lower duties on imported goods typically correlate with improved outlooks for retailers heavily reliant on Asian suppliers.
In Lululemon’s case, again the bounce into the close—although far from negating recent drawdowns—demonstrated that positioning may have become overstretched on the downside. It’s been one of the hardest hit names in the sector. That a reversal occurred following these diplomatic remarks implies a readiness among holders to rotate selectively ahead of trade realignment talks, even amid broader equity volatility.
Volatility and Trade Strategy
Now, with this context, directional conviction on both names should remain qualified. Volatility has not subsided, and sharp intraday swings like the ones we just saw suggest the market remains hyper-reactive. Watching pricing behaviour into the next data cycle will help confirm if these upticks were fundamental re-rates or short-covering.
Our approach in the near term is grounded less in chasing the rebound, and more in scrutinising how deeply embedded the tariff exposure is along each company’s supply chain. That opens the pathway for leveraged setups, but only if any follow-through rhetoric on trade policy arises in tandem with concrete policy drafts or leaked language, ideally from either economic ministries or advanced pre-meeting notes.
No action should be taken on the headline alone. While the announcement was clear and reflected a sea-change in tone, the actual complexity of bilateral negotiations remains long-winded.
In the days ahead, derivatives markets should lend insight into the strength and sustainability of this trading bias. Watch for options volume clustering on weekly expiries, particularly near-the-money strikes in both calls and puts. If premium starts flagging in puts while skew steepens favouring upside, that may indicate that traders broadly expect terms to be announced swiftly, with implications for quarterly guidance.
We read this moment as less about headlines and more about market memory. Whenever US trade partners have floated bilateral lower-duty agreements in past decades, activity among apparel and footwear tickers has repeatedly surged in sympathy—with volatility entering a regime shift. But that regime shift isn’t always linear, especially not in market segments already under macroeconomic pressure.
Before committing long gamma exposure, it’s important to establish the timeframe traders are working within. These are not events that resolve in one week’s headlines, so any structured plays on directional movement should favour low decay, despite proximity to catalysts. Use the calm between statements to build optionality.
