The major stock market indices wrapped up the trading session with gains. The NASDAQ index set a new record high, gaining 90.31 points, or 0.45%, to reach 21,798.70, surpassing the previous record from August 13. It even hit an intraday high of 21,885.62. Other indices rose as well: the Dow industrial average increased by 114.09 points, or 0.25%, closing at 45,514.95. The S&P index improved by 13.65 points, or 0.21%, finishing at 6,495.15, while the Russell 2000 rose by 3.84 points, or 0.16%, to settle at 2,394.89.

Leading Performers

Top performers included Robinhood Markets, which surged by 15.80% due to strong retail trading. Alibaba ADR climbed 4.16% on improved optimism in Chinese tech and policies. Uber Tech grew by 3.70% as ride-sharing demand remained steady. In the S&P sectors, information technology led with a gain of 0.67%. Consumer Discretionary and Materials also moved up. On the flip side, Utilities fell by 1.07%, marking the largest decline among sectors. The NASDAQ reaching a new all-time high, while defensive sectors like utilities drop, indicates a strong risk appetite in the market. The tech sector has outperformed utilities by over 35% year-to-date in 2025. This trend suggests we should focus on bullish strategies, such as buying call options on leading technology and semiconductor stocks. With the market at all-time highs, the VIX volatility index has dropped to around 14, making options relatively inexpensive. This low-cost environment is perfect for buying protective puts on the S&P 500 to guard against a sudden market pullback. History shows that similar low volatility periods often precede corrections, like the downturn in early 2022.

Retail Trading Influence

The big jumps in Robinhood and GameStop indicate that retail trading enthusiasm is rising again, which could lead to short-term volatility in certain stocks. This creates chances for trading short-dated options to take advantage of quick price fluctuations. We should pay close attention to social media trends and short interest levels, as these have been reliable signals since the retail trading boom of 2021. We also see a clear shift away from interest-rate sensitive sectors like utilities and real estate. This suggests that the market does not anticipate an interest rate cut from the Federal Reserve at its upcoming meeting, especially after the August inflation report showed a persistent rate of 3.1%. Traders may consider bearish options strategies on these defensive sectors if this trend continues. Additionally, there is renewed interest in Chinese tech stocks like Alibaba and Tencent, which have struggled for several years. Recent reports of economic stimulus from Beijing could indicate a turnaround for these companies. Bullish call spreads might offer a way to trade safely on a potential recovery in this distressed sector. Create your live VT Markets account and start trading now.

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