Should investors calm on the trade war?

The stock market seems to calm down on the issue of the ongoing (coming) trade war, the Nasdaq index and the S&P500 index have been rising these days and investors seem to ease on the issue of the trade war between the US and other countries. However, here comes a question that whether the investors should worry about the trade war or not.

Investors want to maximise their investment returns while minimising their investment risk. Trade war definitely increases their investment risk since the future global economy becomes much more uncertain and unpredictable. While their risk increases, they tend to seek higher investment returns to compensate their risk. When all investors tend to seek higher investment returns, this could potentially increase the stock return. 

This may imply when the stock market rises in a short period, it does not necessarily mean the stock market is in "a good mood", it might be caused by investors seeking higher returns to compensate suddenly increased risk in the market. Of course, we do not see the entire market increase in the entire market, but there are some sharp increases in certain areas, which imply investors switch to sectors where they expect there are greater profitable opportunities. For example, when the US president announced the US would break the Iran Deal, the oil company stock prices increased sharply while the entire market fell, this was definitely a sign of increase in risk in the market.

To conclude, when we see certain areas have significant increases while the market is falling, it indicates that investors are facing sudden risk increase.