Futures clawed back to flat after an early wobble during Asian hours. The impulse came from fresh White House chatter on tariff relief for autos and from Trump signaling that the additional 100% China tariff won't go into effect and reiterating plans to meet Xi in two weeks, which took some of the edge off macro anxiety. Front-end vol stayed elevated—VIX was close to 30 overnight, the highest since April. Regional banks had another rough session after Western Alliance and Zions disclosed exposures linked to alleged borrower fraud, reigniting concerns about underwriting discipline and tail risk in certain loan books. It's the second-worst session since the Silicon Valley Bank crisis in March 2023.

As we projected, ES1!6662.75 retraced from the mid-channel yesterday and managed to break below the channel support overnight. However, the Trump administration's news pump brought it back to the channel. The tape is weak; Trump has TACOed almost everything he said back on Oct 10, yet the market is still down 2% from its peak and VIX stays elevated.