The trend is a change from the relative calm that dominated markets earlier this year, when a trade agreement seemed to be in the works. The S&P 500 has twice dropped by at least 1.5% this month, as many times as it had in the first four months of the year.

"The trade negotiation with China is pretty much the big elephant in the room and continues to be," Frederick said. "Which is why we're going to continue to see above average volatility like we've seen for the last two weeks, and it's a kind of treacherous spot for people to be in right now."

The dispute between Washington and Beijing grew more heated the last two weeks after the Trump administration made good on a threat to raise tariffs on Chinese-made products and China retaliated with tariffs of its own.

The U.S. government's restrictions on technology sales to Huawei added more anxiety for traders already worried about further escalations in the trade dispute.

But the temporary delay on the restriction of sales to Huawei announced Tuesday, as well as the government saying that the 90-day grace period could be renewed, appeared to alleviate some of those concerns.

The rally particularly benefited chipmakers, which had slumped on Monday.

Intel rose 2.1% and Texas Instruments added 2.2%. Broadcom, which gets about half of its revenue from China, gained 1%. Qualcomm, which gets more than half of its revenue from China, rose 1.5%.

Technology stocks, especially chipmakers, have already been under increased pressure because of the ongoing trade war. The latest move to restrict some technology sales could cut into key revenue sources.