Major US indices showed mixed results in their latest session. The Dow Industrial Average decreased by 316.38 points or 0.70%, ending at 44,693.91. Meanwhile, the S&P 500 saw a slight rise, climbing 4.44 points or 0.07% to 6,363.35, and the NASDAQ increased by 37.94 points or 0.18%, finishing at 21,057.96.<\/p>\n
Chip stocks experienced upward trends. Nvidia rose by 1.72%, Broadcom by 1.77%, and AMD by 2.19%. In contrast, Intel’s performance was more volatile; after reporting earnings post-market, its shares dropped by 3.66%. Subsequently, Intel showed a minor recovery, trading up close to 1%.<\/p>\n
We are seeing a clear split in the market, with industrial stocks pulling back while technology-focused indices hold their ground. Year-to-date, the tech-heavy NASDAQ 100 has gained over 25%, while the Dow Jones Industrial Average is up a more modest 4%, confirming this divergence. This suggests traders should be cautious about broad market bets and instead focus on specific sectors.<\/p>\n
The current environment of mixed signals often precedes a pickup in volatility, even though the CBOE Volatility Index (VIX) has remained historically low, recently trading around the 14-15 level. We believe this presents an opportunity to buy protection or make speculative plays at a relatively low cost. Options strategies that profit from price swings, such as long straddles or strangles, could be effective on indices ahead of upcoming economic data releases.<\/p>\n
Within the technology space, it’s critical to be selective, as shown by the differing fortunes of semiconductor companies. While the iShares Semiconductor ETF (SOXX) is up more than 40% this year, the performance of individual companies varies greatly post-earnings. We would favor using call spreads on the sector’s leaders to capitalize on continued upside while defining our risk.<\/p>\n
Historically, this type of market rotation often occurs during periods of economic uncertainty or shifts in Federal Reserve policy. The industrial average’s failure to hold its record high is a warning sign that the “old economy” stocks may be more vulnerable to a slowdown. Therefore, buying protective puts on an industrial-focused ETF could serve as a valuable hedge against our technology positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Dow drops while S&P and NASDAQ edge up; chip stocks rise, Intel sees post-earnings volatility.<\/p>\n","protected":false},"author":62,"featured_media":16988,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27225","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27225"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27225\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16988"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}