Market wrap: Markets bounce, but the fog of war remains thick

Stocks staged decent bounce overning just as we flagged yesterday, and Asia say modest recovery with a lot of help from the PBoC Valuations on some names looked downright inviting yesterday. But let’s be honest: that only works if you’ve got the liquidity, patience, and a 4–5 year time horizon. No question, a few years from now you’ll probably look back at these prints with nostalgic yearning. That said, yesterday was pure trader mode for me — big bowl of spaghetti-style reversion trades, just tossing everything oversold at the wall to see what stuck. Some did. Some didn’t.

But here’s the thing — we’re all still flying blind until we get real clarity on how Trump’s tariff crusade plays out. There’s no roadmap, just headline roulette.

In Europe, stocks bounced back from their worst 3-day drawdown in five years. U.S. equity futures are flashing green pre-open, following Monday’s rollercoaster. Treasuries clawed back some ground after their sharp selloff, and the dollar slipped slightly against majors.

Still, we’re swimming in a sea of vol. Roughly $10 trillion has been torched from global equity markets since the tariff barrage. As trade war headlines keep dropping, investors are reaching for anything that looks like a lifeline.

Typically, this is where I’d roll out the old “Turnaround Tuesday” playbook — you know how it goes: Sunday’s doomscroll sets up Monday for Armageddon at the open, then NY steps in late, catches the falling knife, and by Tuesday everyone’s pounding the table on a reversal.

But not this time. This tape’s too shaky, too headline-driven, and way too fragile for that kind of swagger. We’re not in a momentum market — we’re in a straddle market. You trade it level-to-level, scalp the extremes, and keep one eye on the vol meter. Anything directional right now? That’s a coin toss wrapped in headline risk.

To put things in perspective, even the big boys can’t agree on the playbook right now. You’ve got BlackRock’s Larry Fink out there calling this a long-term buying opportunity — classic "buy the blood" conviction. Meanwhile, Goldman’s strategy desk is waving the caution flag, warning of a deeper, longer-lasting cyclical bear as recession risk accelerates.

That split says it all — the macro narrative is still murky, and conviction is low across the street. When Fink’s loading up while Goldman’s buttoning up, you know we’re trading in a fog.

Yeah, the sentiment was washed out enough to trigger a bear market rally, and you could see that reflected in some of the tapes. But retail piled in hard on the flush — and let’s not forget: bear markets don’t end until retail fully capitulates. Hope has to die first. And we’re not there yet.

So sure, nibble the dips, scalp the oversold — but don’t lose sight of the fact that we’re still dancing on a knife’s edge.

Volatility like this isn’t just elevated — it’s historic. By my calculations, the major U.S. indices haven’t seen intraday percentage swings this wide since 2015. Not even the COVID crash produced this kind of tape action. And trust me, I’ve lived through more than a few market meltdowns.

If I had to dig for a parallel, the closest one would be October 10th, 2008. I was trading USDJPY that day, riding the full risk-off washout — a vertical, Wile E. Coyote–style drop. The panic was real. But here’s the key: that session marked the end of the first vertical leg down. After that, things started to stabilize — not recover, but at least stop the freefall terminal velocity.

Fast forward to now, and the chaos we’re watching unfold has a similar fingerprint. But unlike ‘08, this one isn’t being driven by a credit freeze — a completely avoidable policy error is triggering it. Last week’s tariffs, in their current format, were a category-five mistake. And let’s be clear: Navarro and Lutnick mangled the math. They confused retail and wholesale pricing in the tariff formula, which inflated the levy by roughly 4x. That’s not just sloppy — it’s catastrophic.

Frankly, this should have been Scott Bessent’s moment. He understands macro flows, currency dynamics, and the reflexivity of markets better than almost anyone. With the right team of quant-savvy policy coders behind him, we could have had a measured, reciprocal digital tariff framework in place — not a napkin sketch that sparked a global liquidation.

Instead, we got a wrecking ball. And China? They’ve made it worse by choosing isolation, retaliation, and doubling down on already destructive behaviors. That part’s the bad news.

But here’s the bright spot: over 50 countries have responded — not with threats, but with a real willingness to engage and create a fairer, rules-based trading environment. That’s the upside. A rare alignment that could, if navigated properly, produce a leaner, smarter version of globalization.

We’ll see what the next few weeks bring. But one thing’s clear: the volatility is a symptom. The system needs a smarter operating manual — and better people at the wheel.