The lack of a trade deal will do much more harm than reaching a temporary compromise

Not surprisingly, traders are glued to the monitors just waiting for news of the talks. The stakes are simple too high. According to some analysts, if there is no deal, the decline in the S & P500 will be almost double, against the backdrop of growth that may follow when a truce is reached.

According to Wells Fargo's strategists, the index can go up by 3% with favorable developments. On the other hand, when the voltage escalates, the index may fall by 7%.

On a large scale, the stock is trading close to the levels of two years ago when Trump came into conflict with his major trading partners, destroying the global economy of slowdown and stagnation. The outcome of the talks today and tomorrow will determine whether Trump will delay the tariffs set for October 15 or increase them.

Investors will be extremely disappointed if this round of negotiations fails. Over the last two years, markets have fallen by an average of 9% over the three times Trump has added to existing or implemented new tariffs.

Over the last year, investors have taken defensive positions, swapping cyclical stocks for low - volatile dividend assets, largely because of uncertainty surrounding the negotiations. Any de-escalation, of course, will create a high risk of appetite.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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