The stocks of big-box retailers and large e-commerce companies rebounded today, as news reports hinted at progress on negotiations between the Trump administration and trade partners. U.S. Treasury Secretary Scott Bessent also reportedly expressed more positive sentiment regarding the United States' frayed relationship with China.
Shares of Amazon (AMZN 2.62%) traded roughly 3.3% higher, as of 1:34 p.m. ET today. Shares of Walmart (WMT +0.45%) traded nearly 2% higher, while shares of Home Depot (HD 0.93%) were up about 1.3%.
Progress with India
The escalating tensions between the U.S. and China over tariffs and trade have been bad news for big-box retailers and large e-commerce companies because they all source a significant amount of their products from China.
Barrons, citing data from Raymond James, recently reported that roughly 30% of Amazon's first-party merchandise comes from China, and that advertisers in the country also spent roughly $8 billion on Amazon in 2024. Walmart reportedly gets at least 70% of its products from Chinese suppliers. Home Depot has done a better job of diversifying away from China since Trump's first term, but CEO Ted Decker last November did say that tariffs would certainly have an impact.
NASDAQ: AMZN
Key Data Points
Yesterday, Trump held a meeting with CEOs from some of the largest big-box retailers, including Home Depot and Walmart. The Financial Times reported today that the Trump administration is working on a deal with India that would allow large retailers like Amazon and Walmart to tap India's $125 billion e-commerce market.
U.S. retailers do business in India, and Walmart actually acquired a controlling stake in large Indian e-commerce company Flipkart for $16 billion in 2018. However, according to the Financial Times, U.S. companies can only act as an online marketplace for Indian companies.
"Since 2006, the US has been trying to open up India's domestic market, and has been stymied successfully ever since," Arvind Singhal, chair of consulting firm Technopak Advisors, told the Financial Times. The Trump administration is hoping to break through on this front, and goods imported to the U.S. from India face a 26% tariff, as laid out on Trump's "Liberation Day," if the U.S. and India don't reach a trade deal before the 90-day pause ends.
In other news, Bessent at a closed conference today reportedly told a group of investors that the current situation with China is untenable and he eventually expects things to cool down, according to Bloomberg.
The situation is fluid and uncertain
Make no mistake, the situation is still quite uncertain and moving fast. As we've seen all month, markets can flip-flop overnight with one headline. I also wonder if a successful deal with India would give the administration more leverage against China, enabling the administration to continue to take a hard line.
Still, it's good to see Trump consulting with the CEOs of big-box retailers. The last thing the president should want to see is Americans going into these frequently shopped stores and seeing major price hikes across the board. Recently reported events give me some confidence that the administration will try and work out a deal that doesn't hurt these companies too much.
In the near term, all three of these stocks could see more pain from bad tariff headlines or if the U.S. consumer shows weakness. But long term, I think Amazon, Walmart, and Home Depot will all be fine. Right now, Amazon has fallen the hardest of these three, so that offers the biggest discount for investors who believe in the business.
