Both the NASDAQ and S&P indices have reached new intraday record highs as trading began today. The NASDAQ is up by 0.55%. The small-cap Russell 2000 has also increased by about 0.55%. Meanwhile, the Dow industrial average is staying steady without setting a new record in 2025.

Market Updates

Current market updates show the Dow industrial average gaining 13 points (0.04%), now at 44,853. The S&P index rose by 14.12 points (0.22%) to 6,404.10, while the NASDAQ increased by 107 points (0.51%) to 21,285. The small-cap Russell 2000 advanced by 11.14 points (0.50%) to 2,268. Looking at individual stocks, Novo Nordisk’s shares dropped more than 20% due to lower forecasts and leadership changes. Eli Lilly’s shares fell by 4%. Merck reported lower revenue and adjusted its guidance, causing its stock to drop. Boeing’s shares decreased by 0.79% despite better plane deliveries. Union Pacific has plans to acquire Norfolk Southern for $85 billion. Nvidia’s shares rose by 1.20%, reaching record levels. AMD’s shares climbed by 2.88%, surpassing its high from October 2024. Amazon and Apple will report earnings on Thursday, while Microsoft and Meta will announce their results after the FOMC rate decision on Wednesday. The market shows a split: the tech-heavy NASDAQ and S&P 500 are hitting new highs, while the Dow Jones Industrial Average is lagging. This indicates that some sectors are doing well without a widespread rally, so our strategy should take this market divide into account.

Semiconductor Stocks Trend

The ongoing strength of semiconductor stocks like Nvidia and AMD is a notable trend. With Nvidia landing big chip orders and AMD surpassing past highs, we’re considering buying call options to ride the upward wave. Tech-focused ETFs like the QQQ are also good candidates for bull call spreads to limit risk while capturing gains. This week is focused on event-driven volatility, particularly with major tech earnings and the FOMC rate decision on Wednesday. The CBOE Volatility Index (VIX) is currently near 14, historically low, making options cheaper to buy. We think buying straddles or strangles on stocks like Amazon and Meta is a smart strategy to benefit from potential price swings after their earnings announcements. The decline in healthcare stocks, evidenced by drops in Novo Nordisk, UnitedHealth, and Merck, presents another chance. We’re looking into buying put options on these individual stocks or on the broader healthcare ETF (XLV) to protect against further declines. So far this earnings season, companies that miss expectations have seen sharp drops, with an average fall of 5.1% the next day, a trend that applies to these stocks. The Dow’s inability to confirm the new highs shows a lack of support from industrial and blue-chip stocks. This weakness, combined with the S&P 500 trading at a historically high forward P/E ratio of over 23, suggests a need for protective strategies. We are considering buying puts on the SPY as a cost-effective way to hedge our long positions against a potential downturn. The Federal Reserve’s rate decision is the major event of the week and is expected to affect all sectors. Fed funds futures indicate a 70% chance that rates will remain steady, so any unexpected comments in their announcement could lead to significant market shifts. We will stay flexible, ready to adjust our positions based on the Fed’s outlook on future policies. Create your live VT Markets account and start trading now.

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