Deutsche Bank strategists said a stronger revenue outlook from Micron helped restore confidence in AI-led growth and lifted US equity futures after recent declines. Micron guided to $50bn of revenue for its fiscal fourth quarter through August, versus a $43.2bn analyst consensus, sending the stock up nearly 16% in after-hours trading. NASDAQ 100 futures rose 1.77%, while S&P 500 futures gained 0.53%, pointing to a break after three consecutive index falls. Brent crude was described as back to pre-conflict levels.<\/p>\n\n
Asian markets advanced, led by the Nikkei up 4.10% and the KOSPI up 5.73%, while the CSI 300 added 1.61%; the Hang Seng fell 1.38% and was on track for a one-year low. In the prior US session, the S&P 500 slipped 0.10% as the Mag 7 fell 0.82% and remained in correction territory, down 11.6% from its 28 May peak. The S&P 500 energy sector dropped 1.73%, even as nearly two-thirds of constituents advanced and the equal-weighted S&P 500 rose 0.71%; Europe\u2019s STOXX 600 edged up 0.08%.<\/p>\n\n—\n\n
We see the strong revenue outlook from Micron as reigniting the AI growth story, pulling tech futures higher. This bounce, especially after three consecutive down days for the S&P 500, presents a clear tactical opportunity for us. The immediate 1.77% jump in Nasdaq 100 futures suggests traders are aggressively buying back into the tech narrative.<\/p>\n\n
Following this rally, the Volatility Index (VIX) has fallen sharply by over 8% to trade back below 15, retreating from last week’s highs. This decline in expected volatility makes selling puts on strong tech names and semiconductor ETFs an attractive strategy. It allows us to collect premium while expressing a bullish-to-neutral view on the sector.<\/p>\n\n—\n\n
Market data confirms this shift in sentiment, with the CBOE equity put-call ratio dipping to 0.65, its lowest point in over a month. We are observing heavy volume in short-dated call options on the Nasdaq 100 ETF (QQQ). This level of call buying indicates strong conviction that the current rebound has momentum for the coming weeks.<\/p>\n\n
While the Magnificent 7 remain in a technical correction, we view the underlying strength in the equal-weighted S&P 500 as a very healthy sign. It shows the market rally is broadening beyond just a few mega-cap stocks. This encourages us to look at call spreads on a wider basket of S&P 500 names, not just the usual tech leaders.<\/p>\n\n
This market action is similar to the pattern we saw in early 2025, where a brief consolidation period was broken by a single AI-related catalyst, leading to a multi-week rally. We believe the coming weeks could see the Nasdaq 100 challenge its all-time highs. We should position for this potential upside, using the lower volatility to structure favorable long-call strategies.<\/p>\n\n\n\n