Shares of Abercrombie closed up 5 percent, while Express closed more than 7 percent higher.
Traders took comments from Treasury Secretary Steven Mnuchin at a policy summit in Washington to mean the administration was leaning away from the border adjustment tax. Mnuchin said there were aspects of the tax the administration liked and disliked.
Krosby also noted the influence of the BAT tax, saying, "The border adjustment tax was also another major factor affecting retail and the BAT added to the pain ... hearing that it's not going to be a make or break for tax reform has given a bit of relief to the retail sector."
Shares of Select Comfort closed up more than 28 percent after the mattress company reported a first-quarter earnings beat of 56 cents per share on revenue of $394 million. Street expectations were that earnings would be 45 cents per share on revenue of $370 million.
Foot Locker's shares likewise rebounded after CEO Richard Johnson boosted confidence with his remarks on April sales, saying, "Encouragingly, we are now having a strong Easter selling period, with April comparable sales likely up low double digits, which we see as confirmation that the customer's appetite for our exciting product assortments has not changed."
The retail ETF also surpassed its 30-day average volume of 5.1 million shares, to reach 6.34 million shares by midday trading Thursday.
Abercrombie shares 5-day performance
Express shares 5-day performance