The Week Ahead

The major story heading into the week is obviously the already escalating tariff trade war involving the US, Mexico, Canada, and China. Markets initially reacted on Friday afternoon, with yields rising and stocks selling off into the close. Over the weekend, more details emerged, along with swift retaliatory measures from the affected countries. Canada has provided the most detailed response so far, with Mexico and China expected to follow suit. At the time of this writing, SPX futures are down about 1.7%, Nasdaq futures are off by about 2.2%, and oil futures are up more than 2%. These moves were even more extreme when futures opened. Futures are already exceeding what options had priced in for the entire upcoming week—even after Friday’s sell-off boosted risk premiums into the close.

Below are the expected moves based on Friday’s options close:

• Expected Moves for the Week:

  • SPY/SPX: 1.5%

  • QQQ: 2.1%

  • IWM: 2.5%

  • USO: 3%

  • TLT: 1.5%

If markets open tomorrow with moves exceeding what options had priced for the entire week—not just in SPX, but also in USO, TLT, and beyond—it would signal that despite knowing tariff details were coming, traders and investors were still caught off-sides in anticipating the market’s reaction.

A key takeaway from this tariff story is how expectations have continued to shift. Initially, the stance was, “It’s just a negotiation tactic.” That evolved into, “They won’t be extreme—there will be carve-outs.” Now, the prevailing narrative is, “They’re real, but only temporary.” Each time, traders have largely shrugged off the news—and each time, they’ve been wrong on the story but more or less correct on the market reaction. The “it’s only temporary” narrative is now the one to watch. If the trade war drags on or escalates further, investors may find themselves off-sides in the market, not just on the news.

Beyond the market’s reaction to tariffs, this week also brings a packed earnings calendar. Here are some key reports and expected moves:

• Monday

  • After hours: PLTR 13%

• Tuesday

  • Pre-market: PYPL 7.6%, SPOT 10.3%, PFE 3.9%, PEP 3.2%

  • After hours: AMD 8.4%, GOOGL 5.9%, SNAP 18%, CMG 6.7%, EA 5.3%, AMGN 4.1%

• Wednesday

  • Pre-market: DIS 6.6%, UBER 8.4%, NVO 6.3%
    After hours: F 6.9%, QCOM 6.6%

• Thursday

  • After hours: AMZN 6.2%

Friday’s jobs number highlights the economic calendar for the week:

• Monday

  • 10am ISM Manufacturing

• Wednesday

  • 8:15am ADP Employment

  • 10am ISM Services

• Friday

  • 8:30am NFP Jobs Number

Short-Term Volatility Signals

The VIX closed at 16.50 on Friday and is tracking around 20 as of Sunday evening. If the VIX opens at 20 or below on Monday, it would still be lower than last Monday’s DeepSeek volatility spike. While this suggests less outright panic, it also doesn’t indicate a strong capitulation buy signal—traders appear to be waiting for the equity market’s reaction at the open. A significant move above 20 would likely require stocks to open weak and continue lower. So far, a VIX spike into the mid 20’s which be a more obvious short term buy signal, seems unlikely unless SPY retests last Monday’s lows below 580. We’ll follow up with more tomorrow based on traders’ reaction to the down open.

This week marks the launch of the new RiskReversal Podcast, where Dan and Guy team up with some of the sharpest minds in markets and tech. The pod breaks down key market-moving headlines, giving investors the insights they need to make informed decisions.

Tune in Monday through Friday for concise, 30-minute episodes packed with market analysis you won’t find anywhere else.

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