Direxion Daily FTSE China Bull 3X Shares (YINN) surged 5.38% in pre-market trading on Wednesday, as Chinese ETFs and ADRs rallied amid growing optimism for a potential de-escalation in US-China trade tensions. The upward movement was triggered by US President Donald Trump's hints at lower tariffs on Chinese goods and his decision not to fire the Federal Reserve chair.

The improved sentiment was not limited to YINN, as other Chinese stocks also saw significant gains. XPeng led the pack with an 8% increase, while major players like PDD and Alibaba rose by 4%. The surge in Chinese equities reflects investors' positive reaction to the softening rhetoric from the US administration, interpreted as a potential shift in strategy regarding US-China trade relations.

Market analysts are cautiously optimistic about the development. Xing Zhaopeng, senior China strategist at ANZ, commented, "The risk sentiment is better today on the headlines. We expect a policy pivot by the US administration in the coming months." This sentiment was further reinforced by US Treasury Secretary Scott Bessent's remarks in a closed-door meeting, suggesting that the current tariff stand-off with China was unsustainable and that de-escalation would come soon. As leveraged ETFs like YINN are particularly sensitive to market sentiment and policy changes, the fund's pronounced pre-market rally underscores the potential impact of improved US-China relations on Chinese equity markets.