Two retail favorites are massive beneficiaries of a federal court order this week telling Apple that it can no longer collect commissions on off-app purchases made in mobile games, per Wedbush Securities.

“This ruling is highly likely to have wide-ranging impacts across the app landscape with clear positives for developers and clear second order positives for companies such as AppLovin and Unity Software,” analyst Michael Pachter wrote.

This news is obviously a boon for game publishers, but also these two aforementioned companies that make money from ad sales and purchases made in games. Pachter has an “outperform” rating on both stocks, with a whopping $620 price target on AppLovin (more than double its current price) and $31.50 for Unity.

With game developers no longer having to fork over money to Apple, that means they can invest those savings in promoting their games — which is AppLovin and Unity’s bread and butter.

“We estimate customer ‘LTV’ (lifetime value) could rise by 60-100%, which should increase user acquisition spending by at least $5-10 billion annually, almost all of which is going to flow to in-app ads if developers maintain current LTV/CAC [customer acquisition cost] targets,” he added.

AppLovin is up double digits over the past two sessions, while Unity has made a much more modest advance.

Well this doesn’t make much sense: Five Below, which imports 60% of its total cost of goods from China, is raising its first-quarter guidance in spite of the 145% tariffs. Investors seem to be buying what the company is selling, though, and the stock is up more than 7% as of 10:30 a.m. ET.

The discount store now expects first-quarter sales to hit $967 million, up from between $905 million and $925 million. Comparable sales are now forecast to rise 6.7%, up from previous guidance of between flat and up 2%.

Five Below plans to build 55 new stores in its first quarter, five more than previously anticipated.

Last month, it was reported that Five Below had paused orders from China “given the escalation in the tariffs.”

US stock futures flipped from negative to positive on Thursday evening thanks not to any reevaluation of megacap tech earnings from conference calls, but rather because China’s Ministry of Finance put out a statement about potential trade talks with the US.

To quote:

“China has noted that senior US officials have repeatedly expressed their willingness to negotiate with China on tariffs. At the same time, the US has recently sent messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this.

China’s position is consistent. If we fight, we will fight to the end; if we talk, the door is open.”

To be sure, this is not glowingly positive language. But both China and the US are talking about talking, and talking about talking generally leads to talking.

Traders are clearly taking this message to heart. One big source of outperformance today comes from ADRs of Chinese companies that trade in the US (like Alibaba). Chinese companies with lots of US sales exposure rose 1.3% overnight.

On the other hand, US companies with lots of sales exposure to China (excluding semiconductor companies) are basically up in line with the market.

Block, the fintech firm led by Twitter cofounder Jack Dorsey, dropped over 22% in early trading after reporting weaker-than-expected Q1 results and slashing its full-year outlook, as consumers aren’t spending liked they used to.

Revenue came in at $5.77 billion, well short of the $6.2 billion analysts were expecting, while adjusted earnings per share were $0.56, below the $0.88 estimate, per Bloomberg. Gross profit rose 9% year over year to $2.29 billion, but Block also slashed its full-year gross profit guidance to $9.96 billion from the previous $10.2 billion, as it’s taking a “more cautious stance” amid a “dynamic macro environment,” according to CFO Amrita Ahuja.

The shortfall was largely due to softness in Cash App, the company’s peer-to-peer payments platform, which makes up ~60% of Block’s gross profit. Tax season spending on Cash App cards — typically a seasonal boost for inflows — was weaker than usual, as users pulled back on discretionary categories like travel and media, Ahuja said. Meanwhile, the app’s monthly active users have also plateaued at 57 million for five straight quarters, prompting Dorsey to say in a shareholder letter that the company had been “too narrow” in its focus and now plans to reignite growth, especially among teens and families.

Still, Block posted its most profitable quarter ever, with adjusted operating income hitting a record $466 million, up 28% year over year. The company aims for a rebound in the second half of the year through Cash App Borrow, its short-term lending feature that received FDIC approval in March, and the upcoming launch of in-house Bitcoin mining chips. Block also began rolling out Afterpay services, the buy now pay later service it purchased for $29 billion in 2022, into Cash App in March.

With today’s plunge, shares are down 46% year to date, and the company’s entire market cap is currently $27.7 billion, less than what it paid for Afterpay.

Liberation Day may have rocked financial markets, but angst over the outlook for the economy following tariffs did not immediately upend the US job market.

Nonfarm payrolls rose by 177,000 in April, well above expectations for 138,000. The unemployment rate held steady at 4.2%, as anticipated.

SPDR S&P 500 ETF and Invesco QQQ Trust hit their highs of the morning in the minutes following the release.

Traders also reduced the expected likelihood of a Federal Reserve interest rate cut by midyear in light of the resilient data. The strength in stocks as interest rates creep a little higher is another reminder that stocks care a lot more about the state of the economy than the level of interest rates.