Why the Markets Are Caught Up in "Tariff Tantrums"

Investors all over the world have been laser-focused on the trade tensions between the United States and China for the simple reason that more than 80% of the companies on the S&P 500 have already reported earnings. There's just not much else to distract people.

Over the last week, the market has seen some of its worst days since December 2018, precipitated by China walking back previously made agreements on trade and intellectual property. Subsequently, both countries have initiated new tariffs on the other, sending the market lower.

But here's the good news: Despite all the hostile posturing from the world's two largest economies, the market remains doggedly determined to continue the upward movement we've seen since the start of 2019.

The combination has resulted in some roller-coaster days for the S&P 500 this week, and that kind of volatility is always profitable.