Shares of Tencent Holdings (TCEHY 3.93%) rallied on Wednesday, up 4% as of 3:48 p.m.

There wasn’t much company-specific news for the Chinese tech giant; however, positive words from U.S. Treasury Secretary Scott Bessent yesterday revived hopes for progress on trade between the U.S. and China. As a result, major Chinese tech stocks rallied today, with Tencent rallying especially strongly.

China and U.S. negotiators to meet in Sweden

During an interview yesterday, Bessent said, “I’m going to be in Stockholm on Monday and Tuesday with my Chinese counterparts, and we’ll be working out what is likely an extension then.”

For reference, on May 12, the U.S. and China agreed to ratchet back their mutual tariffs on the other, which had escalated to the triple digits following China’s retaliation for President Trump’s “Liberation Day” tariff announcement on April 2. The lowering of tariffs was agreed on to allow room for trade negotiations to take place, with the three-month deadline approaching on August 12.

Along the way, there have been some hiccups in the ongoing talks, such as when President Trump accused China of backtracking on commitments to speed up shipments of crucial rare earths materials. That may have led to some skepticism that a deal would be reached in time. But Bessent’s comments yesterday were encouraging.

Image source: Getty Images.

Tencent would benefit from a China recovery

Tencent has managed its business extremely well during China’s three-year quasirecession, and recently showed an acceleration across its business. With a vast tech empire spanning mobile games, social media, streaming video and music, fintech, and cloud services, it’s also in a prime position to benefit from artificial intelligence.

So trade talk optimism could be boosting the Chinese economy, and last week’s news that Nvidia may restart shipping H20 GPUs to China could also be helping shares along. Investors will learn more on all these fronts when Tencent reports Q2 earnings on August 13.