Coinbase shares soared more than 20% on Tuesday and headed for their sharpest rally since the day after President Donald Trump’s election victory following the crypto exchange’s inclusion in the S&P 500.

S&P Global said in a release late Monday that Coinbase is replacing Discover Financial Services, which is in the process of being acquired by Capital One Financial. The change will take effect before trading on Monday.

Stocks added to the S&P 500 often rise in value because funds that track the benchmark will add it to their portfolios. For Coinbase, it’s the latest sharp move in what’s been a volatile few months since Trump was elected to return to the White House.

Coinbase shares rocketed 31% on Nov. 6, the day after the election, on optimism that the incoming administration would adopt more crypto-friendly policies following a challenging and litigious four years during President Joe Biden’s term in office.

The company and CEO Brian Armstrong were key financial supporters in the 2024 campaign, backing pro-crypto candidates up and down the ticket. Coinbase was one of the top corporate donors, giving more than $75 million to a PAC called Fairshake and its affiliates. Armstrong personally contributed more than $1.3 million to a mix of candidates.

While the start of the Trump term has been mostly favorable to the crypto industry, through deregulation and an executive order to establish a strategic bitcoin reserve, legislation has thus far stalled. That’s due in part to concerns surrounding Trump’s personal efforts to profit from crypto through a meme coin and other family initiatives.

Coinbase has been on a roller coaster as well, plummeting 26% in February and 20% in March as Trump’s tariff announcements roiled markets and pushed investors out of risk. With Tuesday’s rally, the stock is now up about 2% for the year.

Since going public through a direct listing in 2021, Coinbase has become a bigger part of the U.S. financial system, with bitcoin soaring in value and large institutions gaining regulatory approval to create spot bitcoin exchange-traded funds.

Bitcoin spiked last week, topping $100,000 and nearing its record price reached in January. The crypto currency surpassed $104,000 on Tuesday.

To join the S&P 500, a company must have reported a profit in its latest quarter and have cumulative profit over the four most recent quarters.

Coinbase last week reported net income of $65.6 million, or 24 cents a share, down from $1.18 billion, or $4.40 a share a year earlier, after accounting for the fair value of its crypto investments. Revenue rose 24% to $2.03 billion from $1.64 billion a year ago.

The company last week also announced plans to buy Dubai-based Deribit, a major crypto derivatives exchange for $2.9 billion. The deal, which is the largest in the crypto industry to date, will help Coinbase broaden its footprint outside the U.S.

WATCH: Bitcoin surges past $100,000

BEIJING — The U.S.-China tariff cuts, even if temporary, address a major pain point: Christmas presents.

Nearly a fifth of U.S. retail sales last year came from the Christmas holiday season, according to CNBC calculations based on data from the National Retail Federation. The period saw a 4% year-on-year sales increase to a record $994.1 billion.

“With the speed of Chinese factories, this 90-day window can resolve most of the product shortages for the U.S. Christmas season,” Ryan Zhao, director at export-focused company Jiangsu Green Willow Textile said Monday in Chinese, translated by CNBC.

His company had paused production for U.S. clients last month. He expects orders to resume but not necessarily to the same levels as before the new tariffs kicked in since U.S. buyers have found alternatives to China-based suppliers in the last few weeks.

U.S. retailers typically place orders months in advance, giving factories in China enough lead time to manufacture the products and ship them to reach the U.S. ahead of major holidays. The two global superpowers’ sudden doubling of tariffs in early April forced some businesses to halt production, raising questions about whether supply chains would be able to resume work in time to get products on the shelves for Christmas.

“The 90-day window staves off a potential Christmas disaster for retailers,” Cameron Johnson, Shanghai-based senior partner at consulting firm Tidalwave Solutions, said Monday.

“It does not help Father’s Day [sales] and there will still be impact on back-to-school sales, as well as added costs for tariffs and logistics so prices will be going up overall,” he said.

But U.S. duties on Chinese goods aren’t completely gone.

The Trump administration added 20% in tariffs on Chinese goods earlier this year in two phases, citing the country’s alleged role in the U.S. fentanyl crisis. The addictive drug, precursors to which are mostly produced in China and Mexico, has led to tens of thousands of overdose deaths each year in the U.S.

The subsequent tit-for-tat trade spat saw duties skyrocketing over 100% on exports from both countries.

While most of those tariffs have been paused for 90 days under the U.S.-China’s new deal announced Monday, the previously-imposed tariffs will remain in place.

UBS estimates that the total weighted average U.S. tariff rate on Chinese products now stands around 43.5%, including pre-existing duties imposed in past years.

For running shoes produced in China, the total tariff is now 47%, still well above the 17% level in January, said Tony Post, CEO and founder of Massachusetts-based Topo Athletic. He said his company received some cost reductions from its China factories and suppliers, but still had to raise prices slightly to offset the tariff impact.

“While this is good news, we’re still hopeful the two countries can reach an acceptable permanent agreement,” he said. “We remain committed to our Chinese suppliers and are relieved, at least for now, that we can continue to work together.”

U.S. retail giant Walmart declined to confirm the impact of the reduced tariffs on its orders from China.

“We are encouraged by the progress made over the weekend and will have more to say during our earnings call later this week,” the company said in a statement to CNBC. The U.S. retail giant is set to report quarterly results Thursday.

China’s exports to the U.S. fell by more than 20% in April from a year ago, but overall Chinese exports to the world rose by 8.1% during that time, official data showed last week. Goldman Sachs estimated around 16 million Chinese jobs are tied to producing products for the U.S.