Tech showed early strength against the SPY on a daily chart. The S&P 500 and Nasdaq fell after a mix of higher inflation and weaker growth, then rebounded.<\/p>\n
Trading through Friday involved sharp intraday swings in tech, similar to Thursday. The approach described was to cut position size and to rely on support and resistance in a trending market.<\/p>\n
The dollar moved back towards 98 amid geopolitical uncertainty. The text also refers to a sector-by-sector view and where the market sits in the current bull run, with sector effects.<\/p>\n
A Supreme Court ruling on tariffs was widely expected and drew little immediate market reaction. Some industries with heavy import exposure, including China-linked imports, were positioned to benefit.<\/p>\n
Attention then shifted to a tariff increase applying broadly. The rate was raised from 10% to 15% on all, which triggered a market response.<\/p>\n
We’re seeing an interesting split in the market, with tech showing some fight against the S&P 500 on a daily chart. In the past five trading sessions, the QQQ has outperformed the SPY by nearly 1.5%, even with the sharp market drops. This suggests options traders might consider call spreads on tech indices to capitalize on this relative strength while defining their risk.<\/p>\n
The intraday volatility is not to be underestimated, creating a tricky environment for setting stops. With the VIX hovering around 24, a notable jump from the low 20s last month, option premiums are elevated. This situation calls for smaller position sizes and, for those selling premium, looking at spreads well outside the recent trading ranges to manage risk.<\/p>\n
This market choppiness is a direct reaction to the latest CPI report, which came in hotter than expected at 3.8%. Looking back to 2025, we saw similar knee-jerk reactions whenever inflation data surprised to the upside, signaling that Federal Reserve policy remains the biggest driver of sentiment. This makes short-dated options around economic data releases particularly risky.<\/p>\n
Adding to the complexity is the US Dollar Index holding firm near the 98 level, a flight-to-safety move driven by ongoing geopolitical tensions. A strong dollar can be a drag on earnings for large-cap tech companies with significant overseas revenue, something we observed repeatedly in their 2025 earnings calls. This may put a ceiling on the current tech rally if the dollar continues its ascent.<\/p>\n
The recent decision to hike tariffs to 15% across the board introduces a new and significant headwind for specific industries. Sectors highly dependent on imports, such as consumer electronics and apparel, are now facing compressed margins, a situation reminiscent of the 2018-2019 trade disputes which saw some retail stocks lag the market by over 10%. Derivative traders should watch for weakness here, potentially using put options on relevant ETFs as a hedge or a speculative play.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Tech outperformed early as equities whipsawed; dollar firmed; tariffs largely shrugged off, then hike sparked reaction.<\/p>\n","protected":false},"author":62,"featured_media":16989,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42490","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\/42490","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=42490"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42490\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16989"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}