There is also an appearance by Fed Chairman Jerome Powell at the Economic Club of New York on Wednesday, and traders are hoping he will calm some of the market angst about rising interest rates. Fed officials recently have sounded slightly more dovish, and the market has begun pricing out multiple rate hikes for next year, though a rate hike is expected when the Fed meets Dec. 18 and 19.

The big event of the week, and one that could impact markets and the economy for months to come, is the meeting between President Donald Trump and China President Xi Jinping on the sidelines of the G-20 in Buenos Aires, which starts Friday. There is hope that both sides will show a willingness to negotiate and hold off on a further escalation of tariffs.

Stocks sold off in the worst Thanksgiving holiday week for the Dow, Nasdaq and S&P 500 since 2011. The Dow was down 4.4 percent for the week, to 24,286, while the S&P 500 was off 3.8 percent, to 2,632. Nasdaq was down 4.3 percent, at 6,938.

Stakes are high for the talks between Trump and Xi, and traders have been awaiting that meeting as a potential catalyst that could shake the market out of its current slump. The S&P 500 has lost 9.7 percent since the beginning of the quarter and is now down 1.5 percent for the year so far. It is also more than 10 percent off its high, entering correction territory.

"It won't be a viable move unless there is reason to think this is more than just a feel-good announcement from the White House. It could be very important for markets," said Quincy Krosby, chief market strategist at Prudential Financial. If the talks show no signs of progress, strategists said it could be a major negative for stocks.

Many economists have factored a trade war into their forecasts for 2019 and expect the tariffs to have some impact on the economy, especially if they are increased, as threatened by Trump. Tariffs on $200 billion in Chinese goods are set to rise to 25 percent from 10 percent in January, and Trump has said he may ultimately tax all Chinese imports.

"The greatest boost Trump could provide to the economy would be to lift the tariffs on China to get a better deal with China on trade. Our sense is a deal is not priced into financial markets, as skepticism remains that either side can reach an agreement politically," notes Strategas Research's Dan Clifton, head of policy research.

"We try to not sugarcoat that reaching an agreement between China and the U.S. will be easy ... we believe the U.S. and China both have an incentive to do a deal now. We do not expect a formal agreement but a framework that guides the path forward for a future deal," he added.

U.S. officials have been hopeful for progress, including Trump, who said that China wants to make a deal, but there were tensions between Xi and Vice President Mike Pence at the recent Apec summit. On Friday, Chinese Vice Minister of Commerce Wang Shouwen was quoted as saying China hopes to meet the U.S. halfway on trade issues.

But it's unclear whether the meeting will result in much progress. Analysts see it as a positive that White House trade advisor Peter Navarro, a strident critic of China, will not be at the meeting.

"This is deeper than just the tariff issue. It's systemic concerns over technology transfers, intellectual property and cyber security. This is something that has festered for years, not only in the U.S. but in Europe as well, about having to do business in China. The president is looking to level the playing field," Krosby said.

Citigroup strategists noted that the risk of trade wars is material and there could still be trade and investment restrictions in the technology sector even if there is a preliminary trade understanding. The U.S. Trade Representative warned in a report this week that China has not changed its ways with regard to technology or intellectual property.

Capital Economics said if China and the U.S. can come to some sort of truce the Chinese yuan could still be under pressure from the diverging policy between the Fed and the Peoples' Bank of China. It said, in a note, that the tariffs, including those added in January, would wipe 0.3 percent off China's economic output.

"Perhaps the biggest impact of any easing of trade tensions would be felt in China's equity markets. A slowing domestic economy has been an important factor in the share price declines, but the timing of sell-offs suggests that concern about a trade war has been a key driver too. A ceasefire would help lift sentiment and probably trigger a rally," according to Capital Economics, adding the rally would likely prove to be temporary.