Stocks are soaring today, after the U.S. and China agreed to cut "reciprocal" tariffs by 115% for 90 days, with plans for further negotiations in the coming weeks. Unsurprisingly, U.S.-listed shares of China-based stocks JD.com Inc (NASDAQ:JD) and Alibaba Group Holding Ltd (NYSE:BABA) are on the rise, up 6.3% and 6.5% at last check, respectively. 

JD.com stock is trading at $35.92, staging a nice little bounce off its 320-day moving average. The equity has now reclaimed its year-to-date breakeven level, and is 11.3% higher year-over-year.

BABA is trading at its highest levels since late March, making a run at its March 17 three-year high of $148.43. Since the start of the year, the stock is up 56.6% and has support in place at its 200-day trendline.

Options bulls are targeting both stocks after the news, with both names seeing double the usual call volume typically seen at this point. For JD, the most popular contract is the June 35 call, while BABA is seeing the most activity at the June 120 call. 

JD.com and Alibaba are both gearing up for their latest quarterly reports this week as well. The former will report before the open tomorrow, May 13, while the latter will report before the open Thursday, May 15. 

While most of Wall Street is cheering today’s tariff rollback, one stock is rallying especially hard: Best Buy Co Inc (NYSE:BBY). The electronics retailer is up 7.6% at $74.09 at last glance, making it one of the top-performing names on the board. The gains come after the U.S. and China agreed to suspend most tariffs -- a move providing immediate relief for retailers heavily exposed to Chinese imports.

Call traders are betting on even more upside. So far today, over 12,000 bullish bets have crossed the tape, which is 7 times the average intraday volume. New positions are being opened at the most popular contract -- the May 75 call.

Today’s surge pushed BBY back above its year-over-year breakeven level, though the stock remains down 13.4% in 2025. On the charts, the equity is gapping back above the $72 level -- an area that briefly acted as support in March, before President Donald Trump’s April 2 tariff rollout sent the shares tumbling to their lowest level since early 2020.

China and U.S. trade talks that ended in lower tariffs for both, triggered an onslaught of upbeat sentiment for the broader market, sending stocks significantly higher to start the week. Not all were so lucky, however, as investors retreated from safe haven assets, sending the likes of mining giant Newmont Corporation (NYSE:NEM) lower.

As last check NEM is off 4.9% to trade at $51.33, headed for its worst daily percentage drop since early April. Despite today's pullback and overhead pressure at the 30-day moving average, the equity sports a 20% year-over-year win.

Options traders were bullish heading into today. The equity's 50-day call/put volume ratio of 4.27 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 78% of readings from the past year.

Short-term traders have been leaning bullish as well. This is per NEM's Schaeffer's put/call open interest ratio (SOIR) of 0.61 that sits in the 34th percentile of annual readings. A further unwinding of this optimism could weigh on the shares.

Newmont stock has also outperformed options traders' volatility expectations over the last 12 months, making this an excellent opportunity to weigh in with options. This is per its Schaeffer's Volatility Scorecard (SVS) of 82 out of 100.

The S&P 500 Index (SPX – 5,659.91) moved lower last week after rising for three out of four weeks with the help of mega-cap technology names. However, the decline was inconsequential, a loss off about 0.4%, analogous to watching paint dry after five consecutive weeks of big up and down movement.

We enter standard May expiration week on the heels of three positive weeks out of five and the SPX 13% above the early April closing low. This is almost 4% below 2024’s close, 8% below the February closing high, and roughly unchanged relative to early April (but with significant drama in-between).

Friday’s SPX close was in a familiar area, in the vicinity of short-term highs in July and August. This was the area of the April 2 close, which preceded President Trump's sweeping tariffs announcement and, subsequently, the April 3 gap and 5% SPX decline the following day.

In other words, after a sharp run up to the 5,665-5,670 area from the April low, there is overhang from hesitant buyers and/or sellers thinking “breakeven” that bought the September 2024 breakout or who might have been extremely long ahead of the April 2 “Liberation Hour.”

In fact, ahead of this past weekend’s trade talks with China, a “once bitten, twice shy” mentality was evident last week. The SPX was not able to make significant strides above the April 2 close ahead of what might be viewed as major potential movement this week pending trade talks with China. The Cboe Volatility Index (VIX -- 2190), however, is not hinting at major volatility ahead, closing at its lowest level in weeks, but around the same level before it more than doubled in a four-day period last month.

“Support heading into the week is at 5,530, which is 10% below the February closing high and the area of the March lows. Potential resistance resides between 5,740 – its 12-month moving average – and 5,783, or the Election Day close in November 2024. The 200-day moving average at 5,745 is sitting nearer the lower boundary of this range.”

- Monday Morning Outlook, May 5, 2025

If Monday’s and this week’s trading generates more movement than last week, the potential support and resistance levels that I discussed last Monday are still worth keeping on your radar.

One thing that is clearly noticeable heading into May expiration week is that SPDR S&P 500 ETF Trust (SPY – 564.34) open interest (OI) is unusually low, with total put OI only in the 25th percentile of daily readings during the past year, according to TradeAlert.

To the extent that put open interest is partially driven by hedging of long U.S.-based stock positions, the low put open interest could be due to less hedging among money managers. Anecdotally, I have seen money managers mention stock markets across the ocean as presenting more value than the U.S. and it seems currency and gold are attracting interest. In fact, SPDR Gold shares (GLD – 306.84) total open interest is at an annual high, perhaps an indication of fund managers moving away from U.S. stocks due to tariff uncertainty.

Since SPY open interest is relatively low, I am focusing on the SPX May 16 expiration open interest for clues as to what to expect this week from an option-related perspective.

What stands out to me is the balance between call and put open interest at half-century and century-mark strikes. As such, these strikes may represent volatility dampeners. In fact, premium sellers would love to see a pin in the 5,700 area on Friday expiration.

Trade talks from over the weekend will likely dictate this week’s action and was a major “known, unknown” at the end of trading last week. Stay in tune with support and resistance levels today and the rest of the week, especially if the SPX moves out of last week’s 5,600-5,700 range on a closing basis.

Todd Salamone is Schaeffer's Senior V.P. of Research

Continue Reading:

• The Week Ahead: Key Inflation Data, More Earnings on Tap
• Indicator of the Week: What a Bullish Outside Day Means for the S&P 500

Subscribers to Schaeffer's Weekend Trader options recommendation service received this IBKR commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Trade talks are in focus, ahead of negotiations between U.S. and Chinese officials, which will begin in Switzerland this weekend. The Dow Jones Industrial Average (DJI) is down triple digits midday, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) sit flat. All three major benchmarks are eyeing their first weekly losses in three, following several days of volatile trading. 

Continue reading for more on today's market, including: 

• Plenty of upbeat metrics fueling Lyft stock's rally today. 
• Upbeat forecast boosts Pinterest stock. 
• Plus, options traders blast soaring TTD; DFDV up 25%; and REAL plummets. 

Trade Desk Inc (NASDAQ:TTD) is the most popular stock amongst options traders today, with 174,000 calls and 72,000 puts exchanged so far -- 9 times the average daily options volume. Expiring today, the weekly 5/9 75-strike call and 80-strike call are the most popular, with new positions opening at both. At last glance, TTD was up 21.4% at $72.73, heading for its sixth-straight win and best single-day percentage gain since February 2023. Gapping former pressure at the 60-day moving average, the equity is still down 38.4% as it distances itself from last month's two-year lows. 

Fintech stock DeFi Development Corp (NASDAQ:DFDV) is up 25.5% at $70.77 at last glance, after the company yesterday morning announced the closing of a $24 million private placement, which will be used for general corporate purposes. Year over year, the equity is up 632%. 

Online marketplace RealReal Inc (NASDAQ:REAL) is down 29.1% at $5.16 at last look, looking to snap a six-day win streak, after wider-than-expected first-quarter losses of 14 cents per share and a revenue miss. UBS raised its price target to $7 from $6, however. Since the start of the year, REAL is down 52.7%. 

Coinbase Global Inc (NASDAQ:COIN) is down 0.9% to trade at $204.57 at last glance, after the cryptocurrency exchange platform shared a first-quarter earnings and revenue miss. Despite stablecoin revenue growth, the company noted tariff uncertainty led to a 17% tumble in consumer trading, as investors lost their appetite for riskier assets.

In response, Oppenheimer and Wainwright slashed their price objectives to $269 and $305 from $279 and $350, respectively. Analysts lean mostly bearish on COIN already, with 16 of 26 in coverage calling it a tepid "hold" or worse. Plus, short interest added 13% in the most recent reporting period, and makes up 5.2% of the stock's available float.

COIN already carries a more than 15% year-to-date deficit, and is trading just above its year-over-year breakeven level. A ceiling at the $225 level has been capping price action since February, but the equity is still relying on support from its ascending 20-day moving average.

Drilling down to today's options activity, with 175,000 calls and 39,000 puts across the tape so far, or 4 times the volume typically seen at this point. Most active is the weekly 5/9 215-strike call, where new positions are being opened. These contracts will also expire after today's close.

Shares of Pinterest Inc (NYSE:PINS) are up 10.7% at $30.83 at last glance, after the social media platform issued a stronger-than-expected current-quarter forecast. First-quarter revenue of $855 topped estimates, while adjusted earnings of 23 cents per share came in just below expectations.

A flood of analysts chimed in with price-target adjustments after the event. No fewer than seven raised their price targets, the highest coming from Citigroup to $41 from $38. On the other side of the coin, six issued price-target cuts, the steepest coming from Jefferies to $27 from $39. 

The positive price action has Pinterest stock gapping above pressure at the 50-day moving average, which has lingered overhead since early March. Now trading at its highest levels since early April, PINS is breaking into positive territory for 2025 -- up 6.7% year to date. 

Over in the options pits, 46,000 calls and 24,000 puts have been exchanged, which is eight times the overall volume typically seen at this point in the day. Expiring today, the weekly 5/9 29-strike call is the most popular, followed by the 32-strike call in the same series. 

The security's Schaeffer's Volatility Scorecard (SVS) stands at an elevated 88 out of 100. This indicates PINS has exceeded option traders' volatility expectations during the past year -- a boon for options buyers.