The Illusion of Victory

The markets stumbled again this week. Not because of an earnings miss, or an interest rate surprise — but because of something far older. Power. Pride. Politics.

U.S.–China tensions have entered a new stage. And the world, once again, is holding its breath.

Over the weekend, global equity markets took their biggest fall in six months, unwinding part of a rally that had lifted stocks more than 36% since April’s lows.

The trigger came from a familiar voice. President Trump announced plans to impose a 100% tariff on all Chinese imports, a statement that sent a bullet through financial markets before most investors had finished their morning coffee.

The VIX, the market’s measure of fear, surged, recording its 51st largest spike in history, placing it among the top 1% of volatility events on record. And just like that, screens turned red.

S&P 500, price return, 5 days

But what caused it runs deeper than a single headline.

It started quietly, beneath the headlines. China stopped buying U.S. soybeans — a symbolic but strategic move as it pivoted to South America.

Washington hit back with steep port fees on Chinese-owned ships, escalating tensions that had been simmering for months.

Then came Beijing’s next move. China tightened export controls on rare earth materials — the obscure but essential elements that power semiconductors, electric vehicles, and defense systems. It was a shot across the bow of the global supply chain.

And finally, Trump stepped in. He announced plans to impose a 100% tariff on all Chinese imports, sending another wave through global markets.

One aggravation follows another, and the rhythm is familiar: fight, pause, negotiate, repeat.

We’ve seen this pattern before.

China makes a move. The U.S. reacts. Talks begin. China rolls back part of its position. Trump declares victory. Cycle complete.

In Trump’s world, there’s only one acceptable ending — winning. And the irony is, it seems as though China is fine with that.

Each round leaves it slightly stronger, slightly more entrenched, and slightly more prepared for the next act. As the U.S. wins the headline, China wins the positioning.

The theatre continues, but the audience changes — investors, voters, and consumers all watching, all reacting, all a little more fatigued each time.

Here's what I think it means for markets.

I don’t think this is a crisis. It’s noise — loud, unsettling, but ultimately transient. Markets are reacting the way they always do: violently, emotionally, before reason returns.

History shows that when volatility spikes this sharply — when fear briefly overtakes fundamentals — future returns have often been strongest. It’s not about calling a bottom. It’s about understanding the rhythm of panic.

Here's what still matters.

The structural forces that have been driving this market haven’t disappeared:

• The ongoing wave of innovation in AI, technology, and blockchain

.• The early stages of monetary easing from central banks.

• The resilience of corporate earnings despite global noise.

These are the quiet tailwinds that shape the next decade, not the next day.

Rare earths, tariffs, and political theatre may dominate the headlines, but they don’t change the deeper current of progress and adaptation.

Here's what I think.

The shouting may sound ugly, but it’s the world we live in — and will keep living in. Power will clash. Markets will shake. And then, like always, they will find their balance again. This is not the end of the story. It’s just another chapter.

For those willing to stay invested, stay patient, and stay focused, it may well be another reminder — that in markets, as in life, the long view always wins. Because perspective isn’t about avoiding the noise. It’s about learning to listen through it.

S&P 500, price return, 5 years

Take the long view.