Rally Day 2: Trading Ranges Contract with $VIX Still Sky High & Market Deeply Oversold

The news cycle—and human nature in general—is so short-term focused that by the time we actually get to 90 days, tariffs probably won’t even be on most people’s radar anymore.

Sure, some folks will still bring it up, but as a whole, society tends to move on quickly. That gives Trump the freedom to pivot to something else and to work out a deal with China.

And honestly, I think that’s the play here. He’s trying to save face—pushing the issue out 90 days and banking on the fact that most people will simply forget about it by then.

Regardless of what happens next, there has been a permanent shift in the tariff-related risk premium in the market. Today’s postponement signals that President Trump has limits.

Before today, a lot of people were unsure if that limit even existed

But now we know. There’s a threshold—some level of pressure—that can get him to back down or shift direction.

More importantly,  today gave us some answers to two big questions regarding tariffs:

1. Does Trump care about the midterms?
Because this is Trump’s final term, many people assume he had no real accountability left. He doesn’t have to worry about reelection, and with no higher office to pursue, the thinking was that political consequences—like public opinion or midterm results—wouldn’t factor into his decision-making process at all when it comes to tariffs. Essentially, the belief was that he had no one left to answer to, and therefore, nothing to lose. Congress attempted to impeach him twice and that had zero teeth whatsoever. So President Trump can literally do whatever the hell he pleases.

And to some extent, that assumption holds water. A lame-duck president does have more freedom to act unilaterally without the usual political calculations. Trump seems especially immune to consequence.

But that freedom has its limits.

If Republicans suffer major losses in the midterms—especially if it’s seen as fallout from an unpopular trade war or economic instability—it could significantly weaken Trump’s ability to govern during the final two years of his presidency. Legislative support would evaporate. Allies in Congress might distance themselves. His influence over the party, and over policy, could diminish rapidly.

So the question became: does Trump care about that at all? Does he care enough about maintaining power and influence—even without another election ahead—to adjust course?

Today’s decision to delay tariffs suggests the answer might be yes. The market knows he can be moved by some level of pressure or fallout.

It indicates that he’s still paying attention to political pressure, still aware of the consequences, and still trying to preserve leverage within his own party. The move wasn’t just about trade—it was about optics, timing, and possibly damage control.

In that sense, the 90-day pause doesn’t just buy time on policy. It signals that Trump, despite the perception of being untouchable in his final term, is still responsive—at least to some degree—to the broader political landscape.

2. Is Trump playing the Joker?

Some people have suggested that Trump isn’t acting strategically at all—that he’s simply trying to intentionally destroy the world. The theory goes that tariffs aren’t really about trade at all; it’s about revenge. Payback for how he was treated in office, for the lawsuits and indictments, and for the sense that he’s becoming irrelevant.

Alfred from The Dark Knight said it best:
“Some men just want to watch the world burn.”

That’s the fear some people had after liberation day—that Trump was acting out of a sense of bitterness and revenge.

But today’s decision to delay tariffs indicates otherwise. A person hellbent on destruction doesn’t postpone chaos for 90 days.

And that distinction matters big time.

Even if he reintroduces tariffs later down the line, the fact that he paused them now suggests he’s still operating out of a sense of self-interest and self-preservation—not blind spite. If he were trying to destroy everything, he wouldn’t have stopped. He would have continued escalating.

This fact alone has substantially lowered the market’s risk premium. As long as investors believe Trump is still driven by self-preservation—even erratically—they can work with that. Because then this is more about incompetence than it is about intentional destruction.

Bottom line: this 90-day extension didn’t just delay tariffs—it shifted the narrative entirely. The dynamic has definitely changed.