S&P 500 futures have increased by 0.6%, indicating a strong market opening. After the Federal Open Market Committee’s decision, there was initial uncertainty, followed by improved sentiment during European trading.
Tech stocks are outperforming, with Nasdaq futures up 1%. Intel shares have surged by 28% following Nvidia’s announcement to invest $5 billion in developing data centre and PC products. Nvidia shares are also up by 3%.
Market Path Forward
Following the uncertainty from the Federal Reserve’s meeting yesterday, the market is now signaling a clearer path forward with a strong, tech-led open. We saw the VIX, the market’s main volatility gauge, spike to over 22 during the post-announcement confusion but it has since settled back below 18 this morning. This sharp drop in implied volatility makes buying options cheaper and suggests traders are positioning for a sustained move higher rather than more choppiness.
This bullish sentiment is largely a reaction to the belief that the Fed is now on hold, a perspective supported by the recent August 2025 CPI report which showed inflation cooling to 3.1%. After the inflation scare we saw earlier in the year, this data gives the market confidence that the cycle of rate hikes is finally over. This environment is reminiscent of the market reaction we observed back in late 2023, when investors began to anticipate a more dovish central bank policy.
The Nasdaq is the clear leader today, driven by the massive news of Nvidia’s $5 billion investment into Intel, causing a ripple effect across the entire semiconductor industry. For derivative traders, this points towards buying near-term call options on the QQQ ETF or on a basket of semiconductor stocks to ride the momentum. The sharp pre-market gains in Intel and Nvidia confirm that big-cap tech is where the institutional money is flowing right now.
Semiconductor Sector Focus
Specifically, the surge in the semiconductor space makes that sector a primary focus for the next few weeks. We are already seeing heavy volume in call options on the SOXX semiconductor ETF, with traders targeting strikes that are 5-10% above the current market price for October 2025 expirations. This indicates a strong conviction that yesterday’s volatility was just a temporary blip before the next leg up, powered by artificial intelligence and data center spending.
