BBC
As the US stock market faces a period of uncertain politics, disappointing earnings from major tech companies, and a seasonal slowdown, investors are looking for ways to shield their portfolios from the market.
The gradual cooling of inflation and the excitement surrounding AI advancements have contributed to the over 17% gain of the S&P 500 this year. The benchmark index has seen an exceptionally calm trading period alongside this gain. It has been 355 sessions since 2007 without a daily drop of 2% or more.
Options market wagers indicate that investors anticipate that tranquility will be challenged in the upcoming weeks. Last week, after a selloff in technology stocks dealt the S&P 500 its second largest weekly drop of 2024, the Cboe Volatility Index often referred to as Wall Street’s fear gauge due to its measurement of demand for protection against market swings, jumped to its highest level since late April.
Even if equities rose again on Monday, there are indications that investors are becoming more worried about tech results and the unpredictable US presidential election. Nvidia, the AI darling, is also being viewed with relative prudence, despite its 138% year-to-date increase. Data from Trade Alert shows that the puts-to-call options ratio hit a two-month low of 0.74-to-1 on Friday.
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