The trade war is back on the table.

Markets are sliding after Trump threatened to “massively” raise tariffs on Chinese goods and canceled his upcoming meeting with China’s president. He’s accusing China of imposing export controls on rare earth metals.

Rare earths have always been central to Trump’s trade agenda. Between the Ukraine deal and tensions with China, he’s made securing these metals a top priority. They’re essential for weapons, chips, AI, and other strategic technologies and the U.S. still imports about 70% of them from China. That’s because China produces 60% of the world’s rare earths and processes nearly 90% of them.

When the first US - China trade deal was signed on May 12, rare earths were a key point of negotiation. Now, Trump claims China is trying to tighten control again. Today’s comments are likely a bargaining tactic rather than the start of a full-blown escalation.

Hence, this selloff will likely be bought.

But the path higher is likely going to be bumpier from here with trade tensions coming back, the Fed still uncertain, and a government shutdown dragging on.

October is known for being the most volatile month of the year.

What’s the right move to make right now?

The market has climbed almost without pause this year. So, a pullback here would actually be welcome. It creates opportunities - a second chance to position into leading companies that you might have missed earlier.

There’s no reason to believe that this bull market is over. But it definitely does not hurt to be cautious in the near term. The chance of a meaning pullback is definitely high.

The focus now should be on managing risk. When the market starts to correct even a little, momentum stocks are usually hit the hardest. The goal is to give back as little of your hard profits as possible. So make sure to keep your portfolio and risk exposure under control.

Here are a few ways to do that:

1. Cut losses early. You don’t want to hold too many losing positions, especially at the start of a correction. Nobody knows how long a pullback will last. That’s why you need to be even more disciplined.

2. Hold some cash. A pullback can create new buying opportunities. But you can only take advantage of them if you have some cash available.

3. Weed out your portfolio. You want to constantly prune your portfolio. Keep the strongest. Get rid of the weakest.

4. Reduce exposure to momentum names. They are the most vulnerable names in a correction and avoid any leveraged bets.

5. Hedge your portfolio: This is a more advanced strategy and not suitable for everyone. If you know what you are doing, you can use short positions, inverse ETFs, or volatility instruments to help manage drawdowns.

Even if this isn’t the start of a bear market but just a normal correction, it can still be painful if you’re not prepared.