Markets extended their declines overnight after the U.S. imposed a fresh wave of tariffs on China, bringing the total levy on Chinese imports to a staggering 104%.

Volatility remains elevated, with the VIX holding above 40 for the third straight session. Even traditional safe havens are failing to function as intended. Risk off assets are failing to provide a suitable hedge, with Gold and U.S. bonds selling off as investors rush to de-risk and meet margin calls.

The Trump administration’s strategy to refinance U.S. debt at lower levels is showing signs of strain, as yields surged across the curve. 10Y USTs peaked at 4.50%, while 30Y yields briefly breached 5%. Credit spreads continue to widen, reflecting a broader deterioration in risk sentiment.

Rather than pivoting, President Trump appears to be employing a martingale strategy, doubling down on each retaliatory move. With China holding most of the leverage, the question becomes: how many more chips can the U.S. afford to throw into the pot?

Markets are now posed between two hopes, either a Trump put or Fed put, to provide a floor. Neither looks immediately forthcoming. With unemployment holding steady and inflation showing signs of resurgence, the Fed is likely to maintain current rates for the foreseeable future. This stands in contrast to market pricing, which reflects expectations of four cuts in 2025, including speculation about a potential inter-meeting cut.

BTC is consolidating around the $75k level, though this could unravel if equities face another sharp leg lower. ETH continues to underperform, drifting toward the $1,400, levels last seen in early 2023. Amid heightened volatility, crypto yield strategies are coming back into focus. Elevated implied vols offer a compelling window to earn carry through structured trades.