Good morning, traders.
You could feel it before the futures even opened Sunday night.
The mood was tense, like a room full of people waiting for bad news they might be able to ignore … but probably couldn’t.
The Trump administration walked back tariffs on countries that didn’t reciprocate with higher tariffs, then exempted many key electronic items, putting expiration dates on those exemptions.
Shifts like this spin everyone’s heads around, but the general mood of markets now is that unilateral negotiations with countries over the coming weeks could soften the ultimate impact.
After all the back-and-forth over the weekend, markets opened higher on Monday. Not full-blown relief.
But a tentative move that reminds you just how sensitive this market is to anything that could squeeze earnings margins.
And that’s really the key: margins.
Investors aren’t just reacting to the idea of tariffs. They’re reacting to how those tariffs could crush the cost structure of companies already operating with limited pricing power.
It’s not just about imports from overseas. It’s about how the ripple effects mess with supply chains, forecasting, and — most important right now — earnings guidance.
Because we’re not just heading into any week. We’re walking right into the heart of earnings season.
The market doesn’t like uncertainty. And this weekend’s tariff news added a layer of uncertainty at the exact wrong time.
You’ve got big-name companies reporting over the next 10 trading days — Goldman Sachs, Johnson & Johnson, Citigroup, Netflix, Blackstone, Prologis, and so many others.
All of them will be stepping up to the mic to tell Wall Street not just what they did last quarter but how they see the rest of the year shaping up.
Tariffs make that guidance fuzzy.
A CFO can’t project costs as confidently when the rules of international trade might change next week.
That’s where the market starts pricing in “what ifs,” and that’s what causes these pre-market shakes and after-hours overreactions.
Safety Isn’t in Numbers
Now, here’s what smart traders are watching: the reaction to earnings, not just the numbers themselves.
Let’s say a semiconductor name beats across the board — earnings, revenue, guidance.
Great quarter.
But if the company mentions even the possibility of being hit by import tariffs, the stock could give up those gains before lunch.
On the flip side, a company that missed slightly but said they’re unaffected by the tariff risk?
That stock might rally hard.
It’s not about perfect results right now. It’s about perceived safety.
In an environment like this, clarity is king.
Any CEO who can come out and say, “We’re not impacted — we’re keeping margins strong,” is going to be rewarded.
Anyone who hedges or waffles is going to get punished — fast.
That’s where the opportunity comes in for options traders.
You’ve got rising implied volatility from macro fear (the tariff headlines), stacked on top of already elevated earnings premiums.
That means inflated prices across the options board.
Follow the (Dollar) Signs
So whether you’re looking to sell premium in names with overstated risk, or buy directional setups in stocks you think will be mispriced post-earnings — this is where seasoned traders can really make their money.
But this is also where amateurs get smoked.
If you’re trading without a plan, or worse — trading based on headlines alone — you’re playing a dangerous game.
The pros aren’t guessing.
They’re identifying stocks with pricing power, clear earnings history, and setups where the options chain gives them an edge.
You don’t need to predict which way the market’s going after the open.
What you need to do is prepare.
Understand which sectors are most exposed to tariffs. Know which stocks are over-owned and due for a haircut, and be ready to take advantage when volatility creates mispricing.
Volatility like this is never comfortable.
But if you’ve got the right tools and you’re thinking like a trader — not a long-term investor — you’ve got a shot to turn this chaos into real opportunity.
Stay tuned for more about balancing stock fundamentals with an ever-changing macro environment. And keeping the short term front and center.
Happy trading,
Jeff
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