(Kitco News) - There are several factors that could fuel volatility in equities this summer, said Verdence Capital Advisors. The S&P 500 has rallied in anticipation of the economy reopening from COVID-19 lockdowns. “The economic data we receive in June/July will be important to see if this is a short two-quarter recession or if it drags through 2H20, something the equity market is not pricing in,” Verdence said. Meanwhile, markets will be focused on U.S.-China tensions, which analysts say have soured due to the COVID-19 pandemic that started in China, as well as China reportedly looking to extend its power over Hong Kong. “The threat of tariffs due to China not being able to fulfill its purchases of U.S. goods and now delisting of Chinese companies is making matters worse,” Verdence said. “If this intensifies, this could stall the rally.” Meanwhile, many investors will give corporate earnings “a pass” for the first and second quarters due to the cornoravirus-related shutdowns; however, the market will be looking for guidance from companies now that the economy is gradually reopening, analysts continued. “Some optimism will be needed to justify the 30%-plus S&P 500 rally.”