Good morning, traders.
Nothing snaps traders to attention faster than the word “tariff,” especially when it’s followed by “cut.”
That’s exactly what happened to kick off the week.
The U.S. and China struck a tariff agreement that flipped the tone of the entire market.
The Dow screamed higher, ripping over 1,000 points Monday. The S&P and Nasdaq followed suit, all riding the high of what looked like an actual step toward cooling one of the biggest economic feuds in modern trading history.
But I’ve been trading long enough to know that when headlines like these hit, the first wave of buyers isn’t usually the smart money.
It’s FOMO-fueled, algo-charged mayhem.
But in this case? I see some real legs if you play it right and keep your eyes on the next big catalysts.
What’s Really Behind the Rally?
The U.S. agreed to slash tariffs on a wide range of Chinese goods, from 145% all the way down to 30%, according to reports.
China responded in kind, lowering its tariffs on U.S. exports from 125% to just 10%.
That’s not a minor tweak.
That’s a signal.
And Wall Street wasted no time reacting.
Tech names took off like a shot. Big industrials bounced hard.
And even some of the more beaten-down small caps caught a bid as traders priced in the idea of smoother international trade and a potential lift in global economic demand.
But let me be clear.
This isn’t a peace treaty. It’s a temporary truce.
The language around the deal includes a 90-day window.
That means we’ve got three months of relative calm before the headlines could get nasty again.
What This Means for You
If you’re a short-term trader, this is your time to be alert and opportunistic.
Market rallies like this are your bread and butter, but only if you’re disciplined.
The move higher has created volatility and momentum, a combination that doesn’t come around every week.
Keep a tight watchlist and stick to high-volume leaders that are breaking out with real interest behind them.
But — and this is a big but — don’t forget the calendar.
Watch This Week’s Landmines
You know what kills rallies faster than trade optimism?
This week, we’ve got CPI numbers dropping today and PPI on Thursday.
These are the reports that move the Fed’s needle, and they’ve been known to punch the market when expectations are off.
If CPI comes in hot? All this excitement over tariffs could get smothered by renewed fears of more Fed tightening.
If CPI cools? We could see an even bigger squeeze higher, especially if traders think Chair Jerome Powell’s hands are tied.
And speaking of Powell, he’s speaking Thursday morning.
After the last FOMC meeting, his tone was cautious. He’s not about to start dancing on the table over one positive headline.
So, don’t expect a cheerleader speech.
Watch for subtle cues in his language around inflation targets and rate policy. Any whiff of concern could shake this rally to its core.
Happy But Cautious
I’m thrilled to see the market catch a bid.
After the kind of chop we’ve had lately, this burst of strength is a gift.
But it’s not a get-out-of-jail-free card.
Stay sharp. Know your levels. Respect your stops.
This week could be huge for momentum traders.
But it could turn on a dime if CPI or Powell spook the Street.
As always, trade smart, not emotionally.
Keep it tight,
— Jeff Zananiri
Markets are moving fast.
Aaron Hunziker will lay out how to navigate it all Friday at 10 a.m. ET. Hear about how to trade it, what to watch, and what comes next.
👉 Grab your spot before it fills up.
*Past performance does not indicate future results.
