Bulls Bet Big on These Three China-Related Stock Trades During Trump Visit

Why It Matters

The rally signals renewed investor confidence that a thaw in U.S.–China relations could revive lagging Chinese tech stocks and accelerate EV‑related partnerships, reshaping trading strategies and capital flows.

Key Takeaways

• Alibaba shares jumped 8% despite earnings miss.
• FXI ETF rallied 2.5% on Alibaba surge.
• Ford stock rose 13% after CATL energy‑storage deal.
• Options traders bought 75k Alibaba calls, 88% of premium.
• KWEB options volume hit $50 million, 96% calls.

Pulse Analysis

The Trump‑Xi summit sparked a noticeable shift in market sentiment, as traders interpreted diplomatic overtures as a catalyst for Chinese equities. Within hours of the meeting, Alibaba (BABA) rallied 8%, defying a disappointing earnings report, and the iShares China Large‑Cap ETF (FXI) followed with a 2.5% gain. This bounce reflects a broader belief that a more cooperative U.S.–China environment could lift regulatory pressures on Chinese tech firms, reviving growth expectations that have been muted since 2022.

Options data underscores the bullish tilt: SpotGamma reported that 88% of the $160 million premium in Alibaba options was in calls, with roughly 75,000 contracts bought versus under 12,000 puts. KraneShares China Internet ETF (KWEB) saw $50 million in call premium, ranking among the day’s top‑ten options volumes. Such skewed activity fuels speculation of a short‑squeeze scenario, especially as retail traders label the phenomenon the “Trump effect.” The surge in call buying not only amplifies price momentum but also signals heightened risk appetite for Chinese‑focused assets.

Ford’s 13% jump illustrates how the meeting’s ripple effects extend beyond pure China plays. A Morgan Stanley analyst highlighted the automaker’s licensing agreement with CATL, a leading Chinese battery maker, as a strategic foothold in the fast‑growing EV market. The partnership could accelerate Ford’s energy‑storage capabilities and align it with China’s aggressive electrification roadmap. As investors digest these developments, the convergence of diplomatic optimism, tech‑stock rebounds, and EV supply‑chain deals may reshape capital allocation across both U.S. and Chinese markets.