We are currently observing that from the last few week, stock market has taken the investor on a literal roller coaster ride. Meanwhile where the drama of U.S. government shutdown and global tariff war continued. Meta’s earning report further dampened the mood of the tech sector. But a positivity-filled headline comes over the weekend — Trump–China Tariff Truce — emerged as a moment of relief for the tech sectors. Now the question is: Is this a temporary relief or starting of a new bullish leg? Let’s understand in detail about the market macro situation, volatility trends, and upcoming opportunities.
⚠️ Market Recap: Volatility Still in Command
We have seen that in last 2 week, U.S. market is clearly in pressure due to government shutdown, short-term uncertainty is created in the market which makes the traders too cautions. But among all these, of the biggest factor is tariff tension between U.S. and China.
The quartely report of Meta (formerly Facebook) also brought the disappointment:
- Technically, Meta beat the EPS and revenue,
- But a $16 billion one-time tax expense wipe-out the profit margin.
Result is that the stock market fell sharply — and the whole Nasdaq came under pressure with it. And After the Meta, there is also bread-based selling in the growth stocks like Tesla, AMD, Microsoft, Shopify, and Netflix. Now the market is only focus at one place — White House’s tariff truce announcement.
🤝 Trump–China Tariff Truce: A Much-Needed Breather
On Last Saturday, The White House confirmed that, there is a landmark trade understanding happens between the President Donald Trump and President Xi Jinping. And this “tariff truce” deal has prevented the immediate conflict escalation and both sides have taken the conciliatory steps.
Deal ke major points:
- U.S. has reduced the import tariffs from 57% to effective 47%.
- After that, China has temporarily suspended the export restrictions on rare earth metals and magnetic components.
- Now Chinese firms again starts buying U.S. soybeans and agricultural goods — which is great news for the Midwest economy.
- Trump has delayed the additional 100% tariff threat for approx. one year.
After this deal, DXY (Dollar Index) marginally soften and global equities also started showing positivity in the Monday future session. For the short-term, this is creating a risk-on sentiments — where many traders confidently taking the re-entry in both equities and commodities.
📊 The VIX Story: How Fear Drives Strategy
VIX, means Volatility Index, a such indicator that measures the fear level of the market participants. When the VIX rises, which means soon, there is a panic moment in the market, and VIX falls, then it indicates that sentiment is calming down.
Historical perspective:
- In evert 3-4 months, a noticeable VIX spike occurs.
- In every 2-3 years, a major spike (COVID 2020, Inflation Panic 2022) see a broad market correction.
Current VIX ≈ 17.8 — which means market is in neutral–stable phase. But further if the shutdown or traiff narrative escalate, then there may be chances that VIX could jump to 25.
Expert View:
- VIX below 18 → Great time for option buying (IV is low ).
- VIX 20–25 → Better phase for option selling (premium high, risk controlled).
- Above 25 → This is only for the experienced traders, with high risk–high reward setup.
💡 How to Profit in Volatile Markets (Options Perspective)
Whether you are a short-term trader or a hedger — volatility understanding is a important key factor for you. The option premium is directly linked to Implied Volatility (IV) and Vega Greek.
Example: If you buy the Tesla share call option, then the VIX is 20, next day the VIX become 30 because of the news — so your option premium will spike despite of having minimal changes in stock price.
The top institutions take the benefits of this volatility cycle — by selling the options when the implied volatility is high and earning profit from the IV crush that follow.
Rule of Thumb:
- Below 18: For the favor option buying.
- 18–20: With the balanced — buy/sell both possible.
- 20–25: For the favor option selling.
- Above 25: With the high-risk regime — only hedge or scalp trades.
🏦 Stocks to Watch This Week
From the dynamic of Tech and AI sectors, this week is going to be very crucial for some of the selected stocks.
🧬 ARM Holdings (ARM)
The long-term chart of ARM showing a bullish continuation. The earning are after 3 days — pre-earnings momentum likely. And according to the traders, January 2027 $230 calls are a strong long-term conviction play.
💻 Microsoft (MSFT)
The Q3 earnings are spectacular — With AI integration and cloud growth both are top-notch. And we have seen that the stock moved up to $514 after the strong guidance. There is also a short-term consolidated breakout is expected.
📺 Netflix (NFLX)
Netflix finally confirmed a 10:1 stock split, which increases both the retail participation and liquidity. The post-split price will be ≈ $110 expected — which is quite attractive for the small investors.
🧠 Palantir (PLTR)
Palantir crosses the $200 level — a psychological resistance broken. The AI and Defense contracts will be crucial in the upcoming earning, the long-term tone – still bullish.
🚗 Tesla (TSLA)
Tesla stock is currently in the resistance zone (≈$480). Guidance remained a bit soft so the short-term correction possible up (to $400–$420). But due to robotaxi and AI updates, the long-term sentiments remain positive.
🔮 Futures Strategy: Predicting Market Direction Smartly
If you want to predict the next-day move estimates earlier then just follow the steps:
Just check MES (Micro E-mini S&P 500 Futures) chart Sunday 6 PM (US Eastern Time).
- MES Gap Up → Monday likely bullish open.
- MES Gap Down → Monday bearish sentiment possible.
Reason is simple: Asia–Pacific markets (China, Japan) open Sunday night U.S. time, their reaction is directly reflected in the US future. With this, you get a 12-hour advance clue about the global direction which is a priceless edge for many traders.
📈 What to Expect This Week
- If Tariff Truce Holds: Market recovery likely, sentiment bullish.
- If Shutdown Extends: Short-term volatility spike possible, but recovery expected.
- If VIX < 20: Bullish bias is sure to be maintained.
- Big Tech: Mildly range-bound before next earnings season.
The Overall tone is Mildly Bullish, as a factor like Tariff cooldown, Meta’s possible rebound, Microsoft’s momentum, and Netflix split all point towards a stabilizing market environment.
🧾 Final Takeaway: Volatility Is Opportunity
In the share market, you will get the real success not just by picking the stocks alone but it comes from understanding the market cycle and mastering the time precision. Shutdown, tariff wars, and earnings shocks — these all are short-term events. Investor who understand the volatility doesn’t panic, they just accumulate.
Market always follows a predictable pattern which is Fear → Panic → Stability → Rally. And now we are entering that stability zone. So if you maintain the patience, planning and position sizing then by the end of 2025, this volatility become blessing for you.
📢 Disclaimer: This article is just educational and research purpose. There is a high risk involve in stock trading and options.
