The Nasdaq index has hit new all-time highs, rising by 0.3%. This increases mainly come from big companies like Apple, which rose 1.6%, and Tesla, which increased by 1.5%. Intuit also gained, climbing by 2.4%. On the other hand, chipmakers are struggling. Micron dropped by 3.5%, Broadcom decreased by 1.9%, and Intel fell by 1.4%. These changes show the mixed performance in the tech sector.

The Nasdaq Rally

The Nasdaq is reaching new heights, but the rally is quite narrow. The gains are mainly from large consumer tech companies like Apple and Tesla. The declining semiconductor stocks highlight a key trend to watch in the coming weeks. Apple’s recent surge seems linked to the positive buzz around the new iPhone 17. Supply chain reports indicate that pre-orders are around 12% higher than expected. For traders, this means there could be more gains ahead, making bullish call spreads on Apple a smart move. In contrast, the decline of companies like Micron and Broadcom points to increasing economic worries. The latest purchasing managers’ index (PMI) data for August dropped to 49.1, signaling a contraction in manufacturing, which is a big market for semiconductors. This follows a trend seen in the second half of 2024 when industrial demand started to weaken.

Trading Opportunities in the Current Market

This mixed performance creates a clear trading opportunity for options traders. Consider buying call options on the Nasdaq 100 ETF (QQQ) to invest in strong tech companies while purchasing put options on the semiconductor ETF (SOXX) to bet against the industry. This approach targets the performance gap between flourishing consumer tech and struggling chip makers. As the market reaches all-time highs, it’s also important to think about risk. The Nasdaq’s volatility index, the VXN, has dropped to 19.5, a level we haven’t seen since the spring rally. This makes protective put options cheaper, providing an affordable way to safeguard long portfolios from a potential market downturn. Create your live VT Markets account and start trading now.

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