According to the Zhitong Finance APP, this week, U.S. stock markets have experienced significant fluctuations. Traders are assessing the latest tariff developments and preparing for Friday's monthly employment report, with options traders expecting more market volatility. Data compiled by Citigroup shows that after President Donald Trump’s speech to Congress, the cost of at-the-money put and call options suggests that the S&P 500 index is expected to fluctuate by 1.4% in either direction on Wednesday. This would mark the largest implied volatility since the day after the U.S. presidential election on November 6. On Friday, market volatility may further intensify: options traders expect the S&P 500 index to fluctuate by 1.3% in either direction, which would be the largest intraday fluctuation on an employment data release day since the regional bank turmoil in March 2023. Signals from the options market indicate that market anxiety is increasing, driven by concerns over a full-blown trade war and a series of weaker-than-expected data that have raised economic uncertainty. On Tuesday, the S&P 500 index fell by 1.2%, erasing gains since election day, as traders increased bets that the Federal Reserve would need to lower borrowing costs to support a potentially slowing economy. Maxwell Grinakov, a strategist for equity derivatives at UBS Group, stated, “The impact of macroeconomic data release days is much greater now than before. Current market volatility is high, so the implied volatility of the S&P 500 index will also be higher.” Later on Tuesday, Trump warned in his speech to Congress that the economy may face more challenges in the future and defended his plan to reshape the U.S. economy through the largest tariff increases in a century. However, after Commerce Secretary Howard Lutnick indicated that Trump is considering partial tariff relief, stock index futures linked to the S&P 500 rebounded. In recent months, fluctuations surrounding economic data have far exceeded normal levels. Data compiled by Asym 500 shows that over the past three months, the average actual volatility of the S&P 500 index on the days of monthly employment data, Consumer Price Index (CPI) reports, and Federal Reserve interest rate decisions has approached 23%, more than double the 12% seen on other trading days. Data compiled by Bloomberg shows that after months of calm, this stock benchmark index has broken out of a narrow trading range. In 2025, on 12 out of 41 trading days, the index fluctuated by 1% or more in either direction, accounting for about a quarter of this year's trading time. As the Federal Reserve needs to respond to Trump's policies, the overall options volatility in the market has increased. Trump's policies include cracking down on illegal immigration, imposing a 25% tariff on goods from Canada and Mexico, and additional tariffs on China, all aimed at increasing fiscal revenue and protecting domestic manufacturing jobs. However, these measures are expected to exacerbate inflation, hinder U.S. economic growth, and impact the Federal Reserve's monetary policy Despite the earnings season nearing its end, the Chicago Board Options Exchange Volatility Index (VIX) is currently at its highest level since December of last year, exceeding the threshold of 20 that has begun to worry traders. Therefore, after the employment data is released on Friday, any signs of persistent wage inflation or progress in alleviation, as well as potential slowing in job growth, could trigger significant volatility in the stock market. The Volatility Index (VVIX), which measures the implied volatility of the VIX, is currently 23% higher than its one-year average. Traders are pinning their hopes on the latest unemployment report to assess whether a labor market that is slowing but still healthy, combined with rising inflation expectations, supports the Federal Reserve's inclination to keep interest rates unchanged in the foreseeable future. Against the backdrop of federal government layoffs and slowing consumer spending, U.S. corporate hiring in February is expected to remain moderate. According to the median of a Bloomberg survey of economists, non-farm payrolls in the U.S. are expected to increase by 160,000 in February. The unemployment rate is expected to remain at 4%, while average hourly earnings are expected to grow by 4.1% year-on-year. Stuart Kaiser, head of U.S. equity trading strategy at Citigroup, stated, "Weakening economic growth data, coupled with news related to Trump’s tariffs, has forced the market to price in greater daily volatility. This also means that the deterioration of economic data today could potentially push up actual volatility."