U.S. stock futures are surging higher this morning. Wall Street bulls are taking charge again after the U.S. and China called a trade truce that could lower America’s Chinese trade deficit.

Over the weekend, Treasury Secretary Steven Mnuchin said that the Donald Trump administration would delay tariffs on Chinese goods and “put the trade war on hold” as the two countries worked out a deal. However, as we have come to expect from this administration, U.S. trade representative Robert Lighthizer said just hours later that Washington may still resort to tariffs.

Wall Street is choosing to believe in a positive outcome this morning. Heading into the open, futures on the Dow Jones Industrial Average are up 0.87%. S&P 500 futures have gained 0.55% and Nasdaq-100 futures have added 0.74%.

In options activity, volume was mostly average on Friday. About 19.6 million calls and 15.8 million puts changed hands on the session. On the CBOE, the single-session equity put/call volume ratio rose to 0.66.  The 10-day moving average ticked higher to 0.58.

Options traders remained focused on a continued stream of Tesla Inc (NASDAQ:TSLA) news. Headlines ramped up over the weekend, including board troubles and new features for the Model 3.

Elsewhere, Chesapeake Energy Corporation (NYSE:CHK) likely squeezed short sellers into a covering following strong earnings and a surge in oil prices. Finally, the surprise departure of Baidu Inc’s (NASDAQ:BIDU) COO and artificial intelligence (AI) guru put the company’s AI ambitions in question.

Let’s take a closer look:

Tesla Inc (TSLA)

Tesla stock fell nearly 3% on Friday, as investor sentiment continued to deteriorate on the stock. Capital concerns remained at the forefront after Goldman Sachs said the company may need to raise $10 billion by 2020 to continue operations.

However, the shares are up sharply this morning following weekend developments. First, Institutional Shareholder Services (ISS) said investors should vote against directors Antonio Gracias and James Murdoch, and vote for an initiative to separate Elon Musk’s roles as chairman and CEO.

Second, Musk tweeted out new developments for the Model 3. An all-wheel drive version will be available next month, though with a price tag of $78,000 — more than double the price of the base model.

Before this weekend’s activities, volume on TSLA options rose to 254,000 contracts, or about 1.6 times the daily average. Calls and puts were split down the middle, as sentiment continues to waffle between bullish and bearish.

That said, the June put/call open interest ratio is already in decline, dropping from 1.72 last week to 1.62 today. Look for more calls in today’s activity following this weekend’s news.

Chesapeake Energy Corporation (CHK)

Soaring oil prices and a solid quarterly earnings report have helped propel CHK stock higher over the past month. That rally picked up steam last week, when CHK broke above its 200-day moving average and former resistance at $4.

While the latest short-interest data has yet to come out, some of these bears may have been squeezed out of their short positions. According to the most recent data, some 21.8% of CHK’s float was sold short — amounting to more than 191 million shares.  With two key resistance levels falling last week, CHK short sellers may be rushing for the exits.

One way for shorts to cover their bets is via call options, and CHK saw a spike in call activity on Friday. Volume surged to 192,000 contracts, more than quadruple CHK’s daily average. Calls gobbled up 78% of the day’s take.

With CHK up nearly 4% premarket, this short squeeze could get worse before things finally settle down. Expect more call volume on CHK today, as short sellers look to ease their pain.

Baidu, Inc. (BIDU)

The future of Baidu’s AI plans are in question now. Last week, COO Qi Lu announced he was stepping down. Lu, a former Microsoft Corporation (NASDAQ:MSFT) executive, was the head of Baidu’s AI research. The news also put pressure on Nvidia Corporation (NASDAQ:NVDA), which has an AI research partnership with Baidu.

BIDU stock plunged more than 9.5% on the news, and profit taking ruled Baidu’s options pits. Volume soared to 168,000 contracts, or more than six times BIDU’s daily average. Calls made up 62% of the day’s take.

This call activity appears to have been tied to the closure of existing positions. Baidu’s June put/call OI ratio rose to 1.31 over the weekend amid Friday’s flurry of call activity.

As of this writing, Joseph Hargett held no positions on any of the aforementioned securities.