Nintendo (NTDOY 2.36%) stock is posting gains in Tuesday's trading. The Japanese gaming giant's share price was up 3.1% as of 3 p.m. ET and had been up as much as 7.7% earlier in the session.

The stock market rallied early in today's trading following news that the Trump administration had started preliminary tariff negotiations with Japan and other countries. While the relief rally for the broader market faded, the news of trade negotiations with Japan is powering gains for Nintendo stock.

Nintendo rises on trade deal hopes

Following a conversation between President Donald Trump and Japanese Prime Minister Shigeru Ishiba yesterday, it looks like Japan could be one of the first countries to work out a new bilateral trade deal. Japan is sending a team to handle negotiations that will be led on the U.S. side by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer.

Nintendo is gearing up for the release of its Switch 2 console, but the gaming platform's debut could be impacted by the tariff situation. If the U.S. and Japan can come to an agreement on tariffs and trade, it could create significantly better launch conditions for the Switch 2.

What's next for Nintendo?

Earlier this month, Nintendo hosted an event unveiling the Switch 2. The platform is scheduled for release on June 5, but Nintendo delayed preorders for the console following the Trump administration's announcement of its new tariff policies.

The Japanese gaming company has said it's moving ahead with the June 5 launch for the platform, but it's possible that the tariff situation could cause Nintendo to raise the platform's price above the $449 level that was previously announced. The Switch 2 is central to Nintendo's strategy over the next five years, and elevated pricing could lead to weaker sales.