Gaotu Techedu Inc. (GOTU) saw its stock soar 6.32% in pre-market trading on Wednesday, outperforming the broader rally in Chinese ADRs and ETFs. The significant uptick comes as investors react positively to signs of potential de-escalation in US-China trade tensions, which have been boosting Chinese stocks listed in the United States.

The optimism stems from recent comments by US President Donald Trump, who hinted at a softer stance on China and the possibility of lower tariffs. "It will come down substantially but it won't be zero," Trump said, referring to tariffs on Chinese goods. This shift in rhetoric has sparked hopes for improved trade relations between the world's two largest economies. Additionally, US Treasury Secretary Scott Bessent's remarks about the unsustainability of the tariff stand-off have further fueled positive sentiment in the market.

While there was no company-specific news for Gaotu Techedu, the education technology firm appears to be benefiting from the overall positive sentiment towards Chinese stocks. Other Chinese ADRs also saw significant gains, with companies like XPeng, PDD Holdings, and Alibaba rising between 3.4% and 8% in pre-market trading. The broader Chinese ETF, YINN, was also up by over 5%.

The market's reaction underscores the interconnectedness of US-China relations and their impact on Chinese companies listed in the US. As trade tensions ease, investors seem more willing to take on risk in Chinese equities. If this positive momentum continues, it could lead to further gains for companies like Gaotu Techedu and other Chinese ADRs in the near term.