Wednesday saw a dramatic U-turn. It caught the market completely off guard.

Only hours after tariffs took effect, President Trump hit the pause button. The 10% baseline will remain intact. But further reciprocal tariffs will be delayed by 90 days.

Except for China… It’s now facing an immediate tariff of 125%.

Stocks, bonds, and our currency were all tanking at the same time. So presumably President Trump decided it might be prudent to change course.

That pause will buy major trading partners like the European Union, Japan, and South Korea (along with up to 100 other countries) time to hammer out a deal.

But this trade war still has a long way to go. Especially with the U.S. and China getting ready to slug it out.

So investors need to remain buckled up and stay cautious…

Tariffs On, Tariffs Off

When tariffs were confirmed on “Liberation Day,” the stock market went into an almost immediate free fall. The S&P 500 lost 10.5% in just two days.

Then, after the tariff pause was announced on Wednesday, stocks rose at breakneck speed. The Nasdaq ripped 12.2% higher. The S&P 500 was up a massive 9.5% in a day. Beaten-down stocks like Apple (AAPL) and Nvidia (NVDA) enjoyed some of their best days ever, gaining 15.3% and 18.7%, respectively.

That’s one heck of a recovery. It no doubt left investors feeling euphoric – or at least relieved.

But we are a long way from a sustainable recovery. The market is unlikely to dust itself off and resume its former long-term rally. Stocks have already dipped back down following Wednesday’s explosion upward. There is undoubtedly more choppiness ahead.

Perhaps the 125% tariff on China is the opening shot in a longer-term ploy to cut a deal. But China and the U.S. appear likely to get bogged down in tit-for-tat exchanges.

And one thing doesn’t change… The markets hate uncertainty.

Auto manufacturers like Jaguar Land Rover in the United Kingdom are putting a halt on exports to the U.S. Global shipping companies are trying to plan their long-term schedules.

On the local front, small business owners might have been looking to invest and grow their business and employ extra staff. But that’s now in doubt.

Once confidence is gone, it takes a long time to recover. And that flows through into the economy… and stocks.

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Remain Cautious

So despite a strong rebound, investors need to remain wary… As quickly as stocks can rip up, they can come back down.

President Trump’s decision on tariffs turned on a dime this week. We can’t know if he’ll change his mind again… or introduce other policies that no one can foresee.

We don’t know how China will play this long-term (and if they indeed will “fight to the end”). Nor do we know the responses from all those other countries who do business with the U.S.

The pause provided some relief. But there’s still going to be uncertainty over the next 90 days until we see where all those tariff negotiations land… not to mention the economy.

In the meantime, prepare for further volatility ahead.

That means tightly controlling your number of open positions. You need to have a clearly defined rationale behind every trade.

Plus, you need to have a strategy to trade both directions in the market. Because there are still going to be big swings.

And above all, you need to be able to accept when you’re wrong and move on to your next trade.

That’s what we’re doing in One Ticker Trader right now. We’ve issued 18 trades in 2025 as of this writing… and we’ve only taken one loss. That’s a 94% win rate so far.

So if you want to learn how we’re maneuvering in this tariff volatility, including three signals I’m keeping a close eye on, then simply go right here to watch my recent briefing.

Regards,

Larry Benedict
Editor, Trading With Larry Benedict