The NASDAQ index ended the day up, bouncing back from a dip into the negatives. It increased by 31.38 points, or 0.15%, closing at 21,129.67. Meanwhile, the S&P index fell for the second day in a row, down by 7.96 points, or 0.12%, to close at 6,362.90. The Dow industrial average also went down, dropping 171.71 points, or 0.3%, ending at 44,461.28.

The Small Cap Russell 2000

The small-cap Russell 2000 dropped as well, down by 10.56 points, or 0.47%, closing at 2,232.39. Federal Reserve Chair Powell did not suggest a rate cut for September, which reduced earlier gains. Today, July 30th, 2025, we’re seeing a distinct divide in the market. While the broader indexes like the S&P 500 are falling because the Federal Reserve is not ready to promise a September rate cut, big tech stocks in the NASDAQ are strong, lifting that index higher. This cautious outlook from the Fed isn’t surprising given recent information. The latest Consumer Price Index (CPI) report from early July shows inflation stubbornly at 3.1%, and a solid jobs report added 210,000 positions in June. This gives the Fed little reason to rush. Expectations for a September cut, tracked by the CME FedWatch Tool, have now dropped below 40%.

Derivative Traders And Market Uncertainty

For derivative traders, this uncertainty may lead to increased volatility in the next few weeks. The CBOE Volatility Index (VIX) is around 16, which is fairly moderate. Buying VIX call options or options on volatility ETFs might be a smart way to benefit from expected market swings as we approach the next Fed meeting. The S&P 500 has now declined for two consecutive days after reaching record highs, indicating some fatigue. Given the drop in smaller companies, as seen in the Russell 2000, traders might consider buying protective puts on broad market ETFs like SPY and IWM. This can help shield portfolios from further declines if concerns about interest rates continue to impact the economy. The strength in the NASDAQ, led by a few large tech stocks, reminds us of 2023 when the “Magnificent Seven” stocks boosted performance. This discrepancy offers a value opportunity for traders. We see potential in strategies that go long on NASDAQ 100 futures (NQ) while shorting S&P 500 futures (ES), betting on the continued outperformance of tech. Create your live VT Markets account and start trading now.

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