US equities edged up late in the session but finished the week lower, as upbeat US data and expectations for NVIDIA results encouraged covering of short positions. S&P Global’s Composite Output Index reached its highest level in more than four years, while Bloomberg analysts lifted their US third-quarter GDP forecast to 2.5%, supporting the S&P 500. Attention is also on the Treasury’s effort to suppress Treasury yields, with Bank of America dubbing it the ‘Bessent put’; a failure to contain borrowing costs would raise funding expenses for hyperscalers’ artificial intelligence spending and could weigh on information technology shares. Goldman Sachs reported hedge funds diversifying away from parts of the S&P 500 into other issuers.
The same yield policy is framed as a potential catalyst for a ‘sell America’ flow into other regions. The STOXX Europe 600 is up 10% year to date versus a 12% rise for the S&P 500, though the gap has been narrowing as European companies delivered an 18% increase in second-quarter earnings per share after flat growth in 2024–2025. Goldman Sachs and JPMorgan project the STOXX Europe 600 at 670–680, roughly 3% above current levels.
Risks To US Tech From Treasury Yield Policy
We suggest derivative traders prepare for a notable shift away from US tech giants as the Treasury’s yield-control measures threaten to backfire. If borrowing costs for artificial intelligence hyperscalers climb, the S&P 500’s 12% year-to-date rally could quickly reverse. Buying protective put options on major US tech indices or NVIDIA before its upcoming earnings release offers a prudent hedge against this downside.
Opportunities In European Equities
Simultaneously, we see a compelling opportunity to rotate capital into European equities using long call options on the STOXX Europe 600. The European index is up 10% this year, heavily supported by an impressive 18% surge in second-quarter earnings per share. This massive rebound follows the flat corporate growth seen during 2024 and 2025, proving that the performance gap with the US is rapidly closing.
Major investment banks are targeting a STOXX Europe 600 rally to the 670–680 level, representing a further 3% upside. We recommend structuring bull call spreads on European index proxies to capture this upward momentum at a relatively low cost. This approach limits our capital risk while positioning us to benefit from the shifting international capital flows.
