(Bloomberg) -- The de-escalation of the trade war has brought some relief to the market globally. Yet when it comes to Chinese equities, investors remain reluctant to bet on big gains moving forward.

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The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong has rebounded almost 17% from its low in April, and the cost of hedging against declines has fallen back to average levels after hitting a high. In the US, the trend is similar for the biggest exchange-traded funds that track Chinese equities.

But unlike during last year’s stimulus-triggered rally, there’s no euphoria this time. While the China Enterprises Index snatched a fifth week of gains, it’s still almost 8% below the high it reached in March. Alibaba Group Holding Ltd.’s results last week poured cold water on the high hopes that revived the tech sector earlier this year, and market watchers still expect Donald Trump to keep tariffs at a level that will curtail Chinese exports after the 90-day truce.

“Investors are likely cautious given how unpredictable Trump and his administration has behaved,” said Han Piow Liew, a fund manager at Maitri Asset Management Pte, a family office based in Singapore. “Investors will have even more reasons to tame their bullishness on China, expecting more uncertain times as the geopolitical drama further unfolds.”

Skepticism reigns after the tariff war already hurt trade in the region and slowed China’s factory activity. Meanwhile, the latest earnings results were a wake-up call for investors who bet on the nation’s big tech companies on hopes for advancements in artificial intelligence, despite intense competition in the space.

In a note last week, JPMorgan Chase & Co. strategists including Tony SK Lee wrote that the options market shows a more balanced outlook now, though dealers’ positioning suggests traders are net sellers of options.

“Investor demand for upside exposure in Chinese equities was subdued despite progress in US-China trade talks,” the strategists wrote. “This marks a reversal from the prior eight months, when investors were active buyers, especially of calls during momentum phases.”

When the market surged last year on stimulus hopes, traders chasing the rally sent a gauge tracking China Enterprises Index options prices spiking. By contrast, that same measure ended last week at its lowest level since January.

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In another note, JPMorgan strategists including chair of global research Joyce Chang cautioned that despite the tariff pause, the competition between the nations extends beyond trade — to technology and geopolitics.

“While markets are focused on the 90-day détente and dramatic reduction in tariff levels during this pause, technology competition between the US and China is likely to further broaden and intensify,” they wrote.

While both Chinese and US equities have benefited from the easing trade tensions, more needs to be done to restore confidence, according to Dave Mazza, chief executive officer of Roundhill Investments in New York.

“A de-escalation of trade tensions and acts of good faith are important steps for restoring confidence,” he said. “This could catalyze a resumption of market leadership for the most influential US and China companies in both markets.”

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