What happened

Shares of TripAdvisor (TRIP 2.08%) were climbing this afternoon, catching a tailwind from today's market rally on a rapprochement in U.S.-Mexico trade relations, dovish words from the Federal Reserve, and even antitrust actions against Alphabet (GOOG 1.43%) (GOOGL 1.42%). Though there was no company-specific news on TripAdvisor, the travel industry jumped as the sector is highly sensitive to macroeconomic trends.

TripAdvisor closed the trading session up 6.3%. Booking Holdings (BKNG 1.41%), the biggest online travel agency, was up 5.9%, and Expedia had gained 3.4%. The S&P 500 finished up 2.1%, showing the broad market was surging.

A woman with her head out of the window of a train

Image source: Getty Images.

So what 

Fed chairman Jerome Powell said the central bank was closely monitoring trade negotiations and said it was prepared to act as necessary, which the market interpreted as a willingness to cut rates if the economy began to slump.  

Elsewhere, comments by Mexico's foreign minister, Marcelo Ebrard, signaled a thaw in trade tensions between the U.S. and Mexico as he said he was hopeful that the two sides could reach a deal at a meeting on Wednesday.

And the House of Representatives on Monday announced the opening of an investigation of Google parent Alphabet, which has elbowed its way into the online travel space, and has become a major competitor to pure plays like TripAdvisor and Booking Holdings. TripAdvisor CEO Stephen Kaufer even called out Google in a recent earnings call, saying that the company is using its dominant position in search in a way that prevents consumers from finding the best options. 

Now what 

There's little question that the travel industry is sensitive to the broader economy. And the Fed's willingness to grease the wheels should benefit operators like TripAdvisor, as could a potential crackdown on Google, which has been grabbing share in the industry.

Ultimately however, the fate of TripAdvisor stock will be determined by the company's own performance. The travel recommendation site has succeeded in building up its experiences and restaurants business, but the core hotel segment is still lagging. Until that changes, the company's growth is likely to remain sluggish.