Some of the biggest presumptive beneficiaries of a US-China trade truce are tumbling

Markets got a big jolt after the close on Tuesday following news that Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are meeting with a top Chinese economic official on Thursday to talk trade. That was quickly followed by interest rate cuts by the People’s Bank of China.

But even with these positive catalysts — and before Apple kneecapped Google and the broader market — a basket of Chinese ADRs listed in the US was down more than 1% today, significantly lagging the SPDR S&P 500 ETF.

Consider these moves in the context of:

a) The bump that these stocks, particularly Chinese ADRs, received after China confirmed that it was talking about talking with the US.

b) The insane rally in US stocks with outsized sales exposure to China on the day 125% tariffs on the world’s second-largest economy were enacted.

When things don’t go up on what appears to be good news, it’s time to stand up and take notice (see: Palantir). Wednesday’s price action has some similarly worrying hallmarks of a “sell the news”-type event.