'Fasten your seatbelt and don't hold your breath': Wall Street scrambles to figure out what's next for stocks after Trump sends shockwaves through markets

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Market volatility was unlikely to dissipate if the trade war between the world's two largest economies continued heating up, strategists said.

, which indicates what kind of swings traders expect over the next 30 days. The VIX typically trades inversely to the S&P, implying a jump in the former would likely mean weakness in the latter.

Despite Monday's spike in volatility, investors haven't yet considered the probability of heightened US-China trade tensions, Xu said. Specifically, she noted that S&P 500 options were not reflecting any kind of event-risk premium for this Friday, when Trump threatened the new tariffs were set to kick in.

One could surmise from Xu's analysis that either the market doesn't think Trump will follow through with his threats, or that investors aren't properly positioned for what's to come. The global sell-off on Monday suggested the latest trade-war escalation was a shock to investors, signaling markets could be in for a"bumpy ride before a trade deal is reached," Bank of America Merrill Lynch global economist Aditya Bhave wrote.

 

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The so called master deal maker is just , predictably, wobbling around the world hoping for something he can claim as “ the greatest deal ever by any American president “. 2020 anyone ?

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