US stocks barely moved today, with major indices ending close to where they started. The S&P 500 was up slightly by 0.02%, while the Nasdaq saw a small drop of 0.01%. The Dow Jones Industrial Average closed down by 11.01 points, or 0.02%, at 44,911.26. The S&P 500 rose by 1.96 points, or 0.03%, ending at 6,468.54. Meanwhile, the Nasdaq fell by 2.47 points, or 0.01%, finishing at 21,710.67.

Russell 2000 Performance

The Russell 2000 index, which represents small-cap stocks, dropped by 28.97 points, or 1.24%, closing at 2,299.08. Intel shares increased by $1.64, or 7.3%, reaching $23.86 after news about potential US government investment. Nvidia’s shares went up by 0.24%, while AMD’s fell by 1.88%, and Broadcom’s gained 0.69%. Netflix shares bounced back, rising by $26.12, or 2.17%, and Amazon’s shares improved by 2.86%, recovering from earlier losses. With major indices stuck at record highs, small-cap stocks are sharply dropping. This situation, where money is flowing into a few large companies while the broader market weakens, indicates caution among investors. The tight trading range of the S&P 500 suggests that the market may consolidate before making a bigger move.

Volatility And Market Trends

The CBOE Volatility Index (VIX) is near its yearly lows, currently around 13, making options cheaper. As we enter a historically volatile period for stocks in late August and September, buying protective puts on indices like the SPX could be a smart hedge. This low implied volatility offers a chance to prepare for a possible market downturn. Intel’s stock surge, driven by government discussions instead of business fundamentals, has significantly raised its implied volatility. The cost of options on Intel has increased, providing an opportunity to sell premium if we expect the stock to trade sideways post-excitement. This is a classic instance of political news creating short-term trading chances in a specific stock. Looking back at the market pullbacks in September 2023 and 2024, the current scenario feels similar. The lack of upward momentum, along with weakness in small-cap stocks, suggests we need to be defensive. We’ll be keeping an eye on a break below the S&P 500’s recent support levels as a signal to increase our bearish positions. Create your live VT Markets account and start trading now.

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