From risk-off carnage to risk-on tease: Markets flirt with calm

Stephen Innes SPI Asset Management

From “risk-off” panic to “risk-on” lite — the Art of the Deal just flipped the script again. Welcome to the never-dull rollercoaster aptly named the "Art of the Deal." Just when markets appeared set to spiral downward, a trial balloon hit the wires: Treasury Secretary Scott Bessent and U.S. Trade Rep. Jamieson Greer will head to Switzerland later this week to face off with China’s Vice Premier He Lifeng. Suddenly, the trade-war apocalypse queue has a VIP trade-détente express ticket, and markets sprung back to life.

If you think you’ve seen this movie before, you have. Just as everyone’s throwing in the towel—calling end-of-days on the “Trump Trade War”—the White House quietly unleashes a “trade deal” teaser to yank markets off the cliff. Cue the bullish trial balloon, headlines flip, longs scramble back in—and rinse, repeat. buckle up: we’re on the spin cycle again.

Still, this Swiss summit—announced in lockstep by Washington and Beijing—marks the first real diplomatic breadcrumbs since Trump’s tariff bazooka (145% on U.S. imports; 125% on Chinese goods) sent stocks reeling. Traders who’d battened down the hatches are now scrambling to hoist sails, chasing any whiff of tariff relief like it’s pure alpha.

Trump’s own mixed messages have only stoked the chaos: one minute, America’s “losing nothing” via a Chinese trade moratorium, the next he’s trolling shoppers with quips about kids “not needing 30 dolls.” Yet here we are, pivoting on the promise of face-to-face deal-making.

Don’t get carried away: the arena’s littered with false dawns. Even a halved tariff rate won’t bullet-proof stocks against inflation risk. Markets are stretched between tariff brinkmanship and a Fed eager to stay in the bleachers. Buckle up—this rollercoaster deal flow could flip again before you click refresh.

Still, it’s impossible to overstate the stakes: these Switzerland negotiations are entering an essential crossroads for markets starved of clarity and craving stability. With tariff threats looming and volatility spiking, this face-to-face reset could be the pivot point that either locks in fragile confidence or re-ignites the “trade war” inferno. Buckle up—near-term market momentum hinges on what comes out of those talks.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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