Trade Wars & Tweet Storms: Markets Shrug and Carry On

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As Trump runs down his list of things to do, the call with Xi didn’t happen on Tuesday, but today could be the day. After Friday and Sunday night’s tariff "smash down," the ES and NQ have been recovering, but yesterday’s rotation was into the Russell 2000 (RTYH25), which closed 34.40 points higher, up 1.52%.

The index markets scratched their way back from most of Monday’s losses despite the ongoing trade war between the U.S. and China. While Mexico and Canada struck a deal, China hit back with tariffs on some American goods, restrictions on Chinese mineral exports, and an antitrust probe into Google. That didn’t seem to faze the index markets, as all four major indices closed higher. Trump responded to China by calling tariffs "an opening salvo" and indicated that the U.S. would levy substantial tariffs against China if the countries can’t come to an agreement.

The VIX took things in stride, settling around its yearly average of 17, while the yield on the 10-year note fell to 4.511%, down from 4.542% on Monday. Oil recovered some of its earlier losses but still closed down 0.60% at $72.70 a barrel. Bitcoin dropped 17.46 points, closing at 97,914.84, while gold continued its rally, up nearly 8.5% this year. It settled just under $2,900 an ounce, after surging 24% in 2024. Recently, JPMorgan Chase moved to deliver about $4 billion worth of gold futures in “an apparent hedge against potential trade disruptions.”

Everything is moving…