Gaotu Techedu Inc. (GOTU) saw its stock soar 5.18% in pre-market trading on Wednesday, riding the wave of a broader rally in Chinese ADRs and ETFs. The surge comes as investors react positively to signs of potential de-escalation in US-China trade tensions.
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.
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 XPeng up 7.8-8%, YINN up 5-5.3%, and major players like PDD Holdings and Alibaba rising 3.4-4%.
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, potentially leading to further gains for companies like Gaotu Techedu if the positive momentum continues.
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