What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) were climbing today on a likely short squeeze and news that the U.S. and China were getting closer to a trade agreement. Though there was no direct news out on the home goods retailer, those items seemed to give the stock a boost.

Bed Bath & Beyond shares were up 5.9% as of 3:40 p.m. EST, while the SPDR S&P Retail ETF (NYSEMKT:XRT) had gained 0.7% after trading up as much as 1.4% earlier in the day.

A carefully decorated bedroom set

Image source: Getty Images.

So what

Bed Bath & Beyond has been one of the worst-performing retailers in the industry, with comparable sales and profits plunging in recent years. The company is in turnaround mode now following the arrival of a new CEO, and the stock has actually doubled since August on hopes for a comeback.

Nonetheless, plenty of investors are lining up to bet on the stock's demise as 70% of its float is sold short, meaning investors expect it to fall.

On the trade front, just a day after saying that a trade deal might have to wait until after the election, President Trump said today that talks with China were going "very well." Other reports also indicated that the two sides were close to reaching a "phase one" deal on rolling back certain tariffs.

That news may have helped give Bed Bath & Beyond a bump and prompted shorts to buy back shares. The stock has plunged in the past on tariff concerns, so it's logical that news about a potential trade deal would lift the stock, alleviating pressure from tariffs.

Now what

Bed Bath & Beyond shares have been rallying since October 9 when the company announced that Mark Tritton would take over as CEO. Tritton came from Target, one of the best-performing retailers these days, where he most recently served as Chief Merchandising Officer, helping to develop that company's omnichannel strategy.

Tritton is expected to employ similar tactics at Bed Bath & Beyond, launching private brands, improving its e-commerce business, and revamping the stores to make shopping easier. We'll get an update on his strategy when Bed Bath & Beyond reports earnings in early January.