The US stock market opened higher, primarily driven by performances from Microsoft and Meta following their positive earnings reports. Meta’s shares soared by almost 11%, while Microsoft’s shares rose by 6.70%. Additionally, Nvidia’s shares increased by 1.81%.
The NASDAQ index recorded a boost of 1.28%, marking it as the leader among the major indices. The S&P index advanced by 0.75%, whereas the Dow industrial average had a modest rise of 0.20%. On the other hand, the Russell 2000 fell by 0.54%.
New All Time Highs For S&P And NASDAQ
The S&P and NASDAQ indices both achieved new all-time intraday highs. Apple’s shares have decreased by 16.63% in 2025, while Amazon’s shares have grown by 5.90%. Other prominent stocks include Alphabet, which increased by 2.40%, and Nvidia, with a growth of 35.29%.
Tesla’s shares have dropped by 20.62% in 2025, showing differing performances among key stocks. Apple and Amazon are set to release their earnings after the market closes, possibly impacting stock movements further.
The market is clearly split between a few mega-cap tech winners and the rest of the field. We are seeing the Nasdaq and S&P hit new highs while the Russell 2000, representing smaller companies, is falling. This divergence suggests traders should be cautious about broad market bets.
The weakness in smaller companies likely reflects recent economic data. The latest CPI report from mid-July 2025 showed inflation holding at a stubborn 3.1%, and the Federal Reserve has signaled it will keep interest rates higher for longer. This environment hurts smaller, debt-reliant firms more than cash-rich giants like Microsoft.
Post Earnings Strategies
For the winning stocks like Microsoft and Meta, the big earnings move has already happened. Traders could consider selling out-of-the-money put options to collect premium, betting that these stocks will not fall sharply in the coming weeks. This strategy benefits from the post-earnings drop in implied volatility.
All eyes are now on Apple’s earnings report after today’s close. With the stock down over 16% this year, expectations are low, creating a setup for a volatile move. Buying a straddle, which involves purchasing both a call and a put option, could be a way to profit from a large price swing in either direction.
We’ve seen this play out before, like in May 2024 when Apple surprised investors with a huge buyback program that sent the stock soaring. Given the poor sentiment in 2025, any positive news on their AI strategy or a similar surprise could cause a sharp rally. A disappointing report would simply confirm the current negative trend.
The weakness in other former leaders like Tesla, down over 20% this year, highlights the ongoing rotation. For traders already holding these struggling stocks, selling covered calls could generate income while they wait for a potential recovery. This strategy caps the upside but provides some cushion if the stock continues to drift lower.
With the major indices at all-time highs but clear underlying weakness, portfolio hedging is prudent. The CBOE Volatility Index (VIX) is currently trading near 13.5, a low for 2025. Buying VIX call options or options on volatility-tracking ETFs could be a relatively cheap insurance policy against a market pullback in August or September.
