It’s wild how fast things can change in the market. One day, you’re looking at a sea of red and wondering how low it can go. The next, stocks are ripping higher like the downturn never happened.
That’s exactly what we saw last week. A single social media post from President Trump triggered a massive market reversal. Suddenly, indices were rallying, Apple (AAPL) jumped double digits, and risk assets surged.
It might be tempting to jump back in and buy everything in sight…
But now is not the time to go all in.
Just because the market is now rallying doesn’t mean the tariff-induced volatility is behind us.
Let’s talk about why you should remain cautious right now… and how to invest wisely for today’s unpredictable conditions.
The market is reacting to headlines, not fundamentals
This latest market rally wasn’t triggered by earnings or improving economic data. It was triggered by a tweet.
Trump announced a 90-day delay on tariffs for almost every country except China—a sharp reversal from just days earlier, when he was holding up charts with sky-high tariff rates.
Investors took the pivot as a sign that tensions were cooling, and the buying frenzy began.
But here’s the problem: We’re in a market where social media posts can move billions of dollars in minutes. And that’s not normal—or sustainable.
The trade war isn’t over—it’s just on pause
Sure, the tariff relief sounds nice. But this isn’t a permanent fix. It’s a temporary 90-day truce.
What’s more, the pause doesn’t apply to many goods from China—arguably the most important player in the trade war equation. In fact, Trump bumped tariffs on Chinese goods up to 125%.
Now, it’s important to note that over the weekend, policies changed yet again… as Trump announced exemptions for certain products—including smartphones, laptops, semiconductors, solar cells, and other electronics.
These products are exempt from the 10% global tariff rate and the 125% China tariff rate.
However, they are NOT exempt from the 20% tariff put in place to stop the flow of fentanyl. In other words, the “exempt” products are still subject to a 20% tariff.
It’s hard to say what will be next after the 90-day pause. As we’ve seen, any new tariff-related announcement could send the market into a tailspin.
There’s a case to be made that this 90-day delay is more about politics than economics. Trump is nearing the end of his first 100 days and could be trying to push through tax cuts, deregulation, or energy legislation as soon as possible.
If that’s the play, we could see more headline-driven market moves in the coming weeks.
Volatility is still the name of the game
These kinds of swings aren’t healthy market behavior driven by steady investors. They’re being fueled by algorithms, leverage, and emotional reactions.
And the market reactions often don’t even make sense.
Let’s take Apple as an example. The company had been selling off thanks to rising tensions with China, where a huge chunk of its supply chain lives. But on the same day tariffs on China soared to 125%, Apple rallied more than 15%.
That kind of reaction isn’t based on logic. It’s based on sentiment and momentum—and it highlights just how disconnected the market can be from reality in the short term.
So, what should you do?
We’re not saying you should sit on the sidelines forever. But the current market conditions call for being cautious and thoughtful about your next move.
- Stick to your plan. Don’t toss your strategy out the window just because of one big rally.
- Avoid emotional decisions. Reacting to short-term headlines rarely ends well.
- Keep some dry powder. If the market dips again—and it likely will—you’ll want to have capital ready to deploy.
- Stick to best-of-breed stocks that can thrive in any conditions. In the latest episode of Wall Street Unplugged Premium, Frank and Daniel share a list of several stocks with a proven ability to navigate an uncertain economy. Join now to listen.
The rally is exciting, sure. But don’t mistake a sugar rush for a full meal. The real economic landscape hasn’t changed much, and the volatility isn’t going anywhere anytime soon.
Be cool. Stay patient. And don’t let a market driven by tweets push you into a corner.
