XPeng Inc. (XPEV) saw its stock surge 9.99% in pre-market trading on Tuesday, January 14, 2025, as the electric vehicle maker's shares rallied along with other Chinese ADRs and ETFs.
The pre-market rally was driven by reports that members of the incoming Trump administration discussed a gradual approach to ramping up tariffs on Chinese goods, easing concerns over potential sharp inflation rises and allowing more room for the Federal Reserve to reduce interest rates.
The possibility of a gradual tariff rollout has stirred optimism among investors, given President-elect Trump's previous threats to impose levies of up to 60% on Chinese imports. Such a plan could ease inflationary pressures and pave the way for the Fed to adopt a more dovish stance on interest rates, providing a potential tailwind for markets.