After the fastest correction for the S&P 500 since the start of the pandemic, market players are reluctant to bet on further losses from here in case tariffs turn out better-than-feared.
All eyes will be on April 2, when tariffs are supposed to kick in. An all-out trade war now appears less likely, with tariffs said to be more targeted than expected. Implied volatility is still relatively high with VIX around the 20 handle and a European gauge looking similar. Vol of vol and SkewDex are heading lower, suggesting investor demand for hedging has thinned after the recent pullback.
