There is currently no confirmation that President Trump has signed an order for extra tariffs on China, leading to confusion in the trading community. Mixed reports about the timing of these tariffs, initially set for midnight, caused further uncertainty after the White House denied earlier claims.
The stock market responded to the ambiguity, with the S&P 500 dropping from a 4% rally to a mere 0.5% increase, while the Nasdaq showed minimal gains. Trump previously expressed hope for negotiations with China, stating they want to make a deal but are unsure how to begin.
Traders Await Further Details
Traders are left awaiting further details as the midnight deadline approaches.
The conflicting signals coming from the administration have led to jittery price action. With the S&P 500 pulling back sharply from a strong rally earlier in the session, and tech shares barely holding onto gains, the reaction in equities says a lot about the current mood. One moment, momentum carries prices upward; the next, headline risk sweeps it all away. That type of whipsaw behaviour is an accurate reflection of how fragile sentiment remains.
Markets had been moving on the assumption that an announcement was imminent around the midnight cut-off. When news broke that the White House was walking back earlier claims, the rug was pulled out from underneath. That shaped short-term positioning rapidly. No follow-through came from earlier optimism, and traders stepped back. The timing here matters. When deadlines like this float without resolution, we don’t just see volatility—liquidity can also dry up.
From where we stand, there’s often a temptation to overreact when headlines shift tone. But judging by how options flows behaved during the sell-off, the response was more cautious than panicked. Volumes rose, but there wasn’t a scramble for downside protection or evidence of broad portfolio hedging. Instead, what showed up most were short-dated contracts being dumped or flipped. That tells us that traders are managing risk in tighter windows, avoiding exposure across uncertain periods.
Potential Resumption Of Talks
Lighthizer’s team has met with negotiators multiple times in past cycles, and any suggestion that talks might resume has usually been enough to nudge futures higher. However, this time around, the delay in communication has worn a bit thin, and it’s showing in how quickly gains are faded. There’s less appetite now for buying into rumours.
Those running books against high-beta tech or industrial names will likely need to pay close attention to how macro traders are sizing up positions. A lot of them seem unwilling to take directional risk ahead of surprises, fairly so. With no clear decision from the executive branch, making predictive bets on tariffs is a coin toss.
We’ve seen this movie before—especially with headlines bouncing around late in sessions—and the better play has often been layering into straddles or fading stretched intraday moves rather than chasing reaction spikes. There’s also been a finer balance lately between aligning with short-term headline momentum and stepping back when clarity is absent. In the coming sessions, watching the skew in weekly options should offer some insight into whether premium sellers expect more of the same.
It’s worth noting that volatility in rates markets has been comparatively muted, suggesting that this episode is being viewed more as a tactical move than a structural shift. That distinction might only last if this uncertainty drags on without statements or guidance. As long as clearance doesn’t arrive from the top, pricing pressure will likely remain concentrated in those product areas exposed to global trade or arbitrage-sensitive sectors.
