What Happened?
Shares of personal computing and printing company HP (NYSE: HPQ) jumped 5.9% in the afternoon session after the company announced it had commenced operations at a new manufacturing facility and an AI Research & Development Center in Saudi Arabia. The new factory, located in Riyadh, began by producing the HP EliteDesk AI PC and was set to expand its production line. This move was designed to bring manufacturing closer to customers in the region, aiming to improve delivery times and supply-chain strength.
Contributing to the positive momentum, the major indices rebounded as signs of easing trade tensions between the U.S. and China emerged over the weekend.
The tech-focused Nasdaq Composite jumped around 1.7%, while the S&P 500 gained 1.2%. This rebound follows a significant sell-off the previous trading day, which saw the Nasdaq plummet 3.6% and the S&P 500 sink 2.7% after threats of new tariffs heightened fears of a trade war. Investor sentiment improved after the U.S. President adopted a more conciliatory tone toward Beijing in a social media post. The shift in language helped calm market jitters and spurred a broad-based rally as investors welcomed the potential de-escalation of the trade dispute.
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What Is The Market Telling Us
HP’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 5.4% on the news that President Trump threatened a 'massive increase in tariffs' on Chinese imports, reigniting fears of a renewed US-China trade war. The unexpected comments, made in response to Beijing's plans to tighten export controls on rare-earth minerals, reversed early market gains and sent major indices tumbling. Rare-earth minerals are crucial for components used in the electronics and automotive industries. The tech sector led the losses, with the tech-rich Nasdaq Composite falling 1.7%. The threat jolted Wall Street, sparking concerns that escalating trade tensions could disrupt global supply chains and increase costs for many technology companies that rely on components or manufacturing from China.
HP is down 16.5% since the beginning of the year, and at $27.12 per share, it is trading 31% below its 52-week high of $39.30 from November 2024. Investors who bought $1,000 worth of HP’s shares 5 years ago would now be looking at an investment worth $1,378.
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