Wall Street veteran David Rosenberg warns that China's stock market is still a risky bet despite its roaring start to the week.

With the trade war playing in the foreground, the Gluskin Sheff chief economist and strategist sees fundamentals pointing to more trouble not only in China, but in the United States, too.

"When you can get a 4 percent bounce off of some hopeful words out of Beijing, because there's no real specific action, it just goes to show you how deeply oversold their stock market was," Rosenberg said Monday on CNBC's "Trading Nation." "This is really just a flash in the pan as far as I can see."

His thoughts came following the Shanghai Composite's best day since March 2, 2016. Monday's rally was sparked by Chinese authorities' pledge to support China's economy by counteracting the negative impact from U.S. tariffs. The Shanghai Composite has tumbled 15 percent since early June. The index closed down by more than 2 percent on Tuesday.

U.S. stocks didn't share the same positive momentum on Monday. The Dow and had another volatile day, ultimately closing down about a half percent. The S&P saw its fourth negative session in a row. Tuesday's futures prices pointed sharply lower.

Rosenberg contends the latest struggles aren't tied to China.

"I don't think that the emerging markets or China are going to bring the U.S. economy to its knees. The U.S. economy, broadly speaking, is much more domestic," he added. "Ninety percent of U.S. GDP is through domestic demand."

China may not knock over the U.S. economy, but Rosenberg cautions that a big threat is still lurking, mostly in the form of Federal Reserve policy.

"A lot of the growth we're seeing right now is related to the fiscal stimulus — which is not something I expect to influence the economy to perpetuity. And there has been a lot of preordering ahead of the tariffs coming down the pike," he said. "We're going to be seeing a big slowdown."

That downturn may be deeper than most investors think.

"Recessions, I know it's a horrible word, but there have been 10 of them since World War II. Thankfully, they don't happen every single year, but they do happen. And, the Fed's thumbprints are all over every recession," Rosenberg said. "So, why would it be different this time?"