Tuesday was a good day on Wall Street, with major market benchmarks climbing sharply despite a new volley of tariffs between the U.S. and China. Following the U.S. decision to put tariffs on more Chinese goods, China responded in kind, announcing levies on $60 billion in U.S. products. But market participants seemed to focus on the fact that the tariff rates that China selected were lower than previously anticipated, matching the U.S. move to have a temporarily lower tariff rate that could rise if the trade dispute is not resolved by the end of 2018. Even with triple-digit gains for the Dow Jones Industrial Average, some stocks saw even bigger moves higher. Cronos Group (NASDAQ:CRON), Tilray (NASDAQ:TLRY), and SunPower (NASDAQ:SPWR) were among the best performers on the day. Here's why they did so well.
Cronos and Tilray are flying high
Two of the stock market's big winners today were marijuana stocks, with Cronos climbing 14% and Tilray soaring 29%. To some extent, the same forces are driving both stocks higher, including the impending legalization of recreational marijuana in Canada next month and the opportunity for expansion into more markets internationally. Some of the gains are also likely due to the fact that unlike some of their peers, including Aurora Cannabis and Canopy Growth, neither Cronos nor Tilray has yet found a major partner outside the marijuana space to consider new products and distribution methods.
For Tilray, one news item shows its potential to play a key role in the future of cannabis research. The company announced that it will be able to supply a cannabinoid drug to researchers at the University of California at San Diego, who are looking to run a clinical trial for patients suffering from a nervous disorder. By meeting standards for the U.S. Drug Enforcement Administration for exporting cannabis-related products from Canada into the U.S. market, Tilray could build a name for itself in supplying other researchers looking at the medical properties of cannabis.
Meanwhile, Cronos has its own aspirations to serve the needs of those looking at cannabis for medicinal purposes. Through its collaboration with Gingko Bioworks, Cronos hopes to take high-grade cannabinoid production to a new level. If it can do so in a cost-effective way, then Cronos could earn the competitive advantage that investors have been waiting for. It's far from a sure thing, but at least today, speculative fever is strong in marijuana stocks and sending shares higher across the industry.
SunPower shines bright
Finally, shares of SunPower jumped 15%. CEO Tom Werner gave a statement saying that the solar panel company's proprietary interdigitated back contact solar cells and modules have been excluded from announced tariffs from the Trump administration. Tariffs have been a big part of the difficulties that the solar industry has had lately, as they've hurt demand for solar projects. In turn, that's forced providers like SunPower to cut prices on their products, creating a vicious cycle of downward sales. With today's news, though, SunPower hopes to get a competitive advantage over peers who remain subject to the tariffs. Investors hope that'll be enough to get the stock moving back in the right direction for the rest of the year and beyond.