Sohn said key will be for the S&P to hold the 2,580/2,590 level. The 200-day is widely watched by technicians and other market pros alike. It is an indicator for price trends and simply is the average close of the last 200 sessions.
Stocks, led by tech and Amazon, bounced in the final hour of trading Tuesday, after Bloomberg reported that sources say the Trump administration has no plan to go after Amazon. Amazon has been under pressure from multiple attacks by President Donald Trump on Twitter, who says it's not paying enough taxes or enough for Postal Service delivery.
"The No. 1 concern the market has right now is making a blunder in trade policy, and that could happen by overreaching with China or not renegotiating NAFTA, and both of those are credible possibilities," said Art Hogan, chief market strategist at B. Riley FBR. "Regardless of jobs or monetary policy, our main concern this week is not making a mistake in trade policy. That has much more ramifications for the U.S. economy."
The White House was expected to unveil a new list of tariffs on Chinese goods, just days after China leveled new tariffs on U.S. goods in retaliation to U.S. steel and aluminum tariffs.
On the economic front, economists expect ADP to report 205,000 private payrolls were added in March, slightly above the 195,000 total nonfarm payrolls expected Friday in the government employment report.
ADP is expected at 8:15 a.m. ET. Services PMI is expected at 9:45 a.m., while ISM nonmanufacturing is at 10 a.m. Factory orders are also reported at 10 a.m.
"I don't expect the economic data to prove to be the primary driver. … We'll take our cue from what's going on in the equities market, which is driven by the headlines out of Washington. We are very much in a reactive market for Treasurys, as we get a sense for the next proverbial shoe to drop," said Ian Lyngen, head of U.S. rate strategy at BMO.
Treasury yields moved higher Tuesday, with the 10-year at 2.75 percent. Yields move opposite price, and bonds were sold into stock market gains.
"It is more about watching the level of uncertainty in global markets than it is about a specific data point, particularly when it's not really the payroll data anyone cares about. It's really about average hourly earnings," said Lyngen.
Economists expect hourly wages rose 0.2 percent, and the markets have been fixated on wages for any signs of inflationary. If wage gains are greater than expected and inflation starts to pick up, that could be a signal that the Fed would have to speed up interest rate hikes.
Fed speakers Wednesday include St. Louis Fed President James Bullard at a banking conference in Arkansas at 9:45 a.m. and Cleveland Fed President Loretta Mester, who speaks at 11 a.m. at Central State University in Wilberforce, Ohio.