Investors are once again worried about the Sino-US trade war. But Vall Street is not completely overwhelmed.
Despite the recent decline, the S & P 500 is still only 6% of its peak. The VIKS volatility index also did not show panic.
Investors know that President Trump is very worried about the volatility of the stock market. They believe Trump will not allow the stock market to fall sharply before the next presidential election.
Vall Street expects that, if the stock market is showing a sharp fall, the White House would rather withdraw and reach a trade agreement with China, and does not want to face the risk of losing 2020.
Carter Mack, president of the JMP Group, said: "If the impact on the economy and the stock market is too high, it must find a solution that preserves its face.
According to Stephen Moore, Trump Campaign Advisor, "Trope will check the financial market every few hours. He understands that if the stock market and the economy paralyze him, he will not be re-elected."
In recent weeks, financial markets have fallen as a result of the escalation of a trade war between China and the United States. Hard investors turned their money into bond markets, and 10-year bond yields fell to a low level since the end of 2017.
Trump recently threatened to impose customs duties on all imported goods from China. The Chinese state media said they could make serious reprisals, including restrictions on the export of rare countries and even the sale of US bonds.
The G20 summit is due to take place next month, and investors hope that Trump's trade negotiations with Xi Jinping will make progress.