Insights 
VT 
The major US stock indices have reversed their earlier gains. The NASDAQ index, which had risen by 327.81 points, is now down 5 points or 0.02% at 21,123. The S&P index is down 16.38 points or 0.26%, standing at 6,346.52 after earlier gains of 64.12 points. The Dow industrial average has decreased by 237.15 points or 0.54% to 44,220, having previously gained 204.54 points.
Amazon and Apple are under the spotlight as they report after the closing bell. Amazon’s shares have increased by 1.49%, while Apple’s shares have decreased by 0.53%. Microsoft shares are up $20 or 3.96%, although they had risen as much as $42.21 during session highs. Meta’s shares have increased by $80 or 11.53%, reaching session highs with an increase of $89.54.
The Nasdaq Decline And Stock Performances
An update indicates the NASDAQ index has further declined by 30 points or 0.14%, and the S&P has dropped 23 points or 0.37%. The Figma IPO has performed well, opening at $85 and now trading at $109.58, having been priced at $33 a share.
The market’s failure to hold its morning gains is a clear warning sign for the coming weeks. We are seeing conviction fade as sellers step in, turning what should have been a strong session into a negative one for the major indices. This intraday reversal points to growing exhaustion among buyers.
With Amazon and Apple reporting earnings after the close, a surge in volatility is almost certain. We have seen the CBOE Volatility Index, or VIX, spike over 12% today to touch 17.5, reflecting how the options market is pricing in significant price swings. This is the highest the VIX has been in over a month, signaling increased fear.
For derivative traders, this means it may be time to buy protection. Purchasing puts on broad market ETFs like the SPY and QQQ could guard against a potential downturn that extends beyond just one session. The price action today looks like the start of a broader risk-off move.
This pullback is happening even as the S&P 500 remains up over 15% since the start of 2025, suggesting a classic case of profit-taking. We saw a very similar pattern of market weakness in the late summer of 2023 after a strong first-half rally. History suggests this choppiness could continue through August.
Market Weakness And Trading Strategies
The weakness in individual mega-caps like Microsoft and Meta, which gave back much of their strong opening gains, is another bearish signal. Traders might consider selling call spreads on these names, betting that their near-term upside is now limited. Their failure to lead the market higher is a significant crack in the rally’s foundation.
However, the massive success of the Figma IPO shows that speculative money has not completely left the market. This creates a difficult environment where the broad market is weak but certain stories can still generate huge excitement. It means traders must be selective and not assume everything will move down together.
In the weeks ahead, the smart play is to be cautious with long positions and consider strategies that profit from either a drop in prices or a rise in volatility. Using options collars to protect existing stock positions could be a prudent way to stay in the market while guarding against a deeper summer correction.
