Meta Platforms Experiences a Stock Drop The Federal Reserve cut interest rates by 25 basis points but remains cautious about future cuts in December. Following this announcement, yields on US treasuries with terms from 12 months to 10 years rose by over 2%. The Dow Jones and S&P 500 both fell, while the NASDAQ Composite increased by 0.55%. The Federal Reserve’s message has created uncertainty, making a December rate cut less likely. With bond yields increasing and the VIX volatility index jumping over 15% to close at 22.5 yesterday, we can expect volatile markets in the coming weeks. This is a good time for strategies that can profit from either specific directional bets or heightened volatility. Alphabet’s strong performance, especially its 34% growth in cloud revenue, sets it apart from competitors. Reports from Q3 2025 indicate that Google Cloud’s market share has risen to 12%, showing it is effectively gaining ground. This provides an opportunity to take bullish positions, such as buying November call options or selling put credit spreads to benefit from its upward momentum. Strategies for Microsoft and Meta On the other hand, the negative reactions to Microsoft and Meta present different opportunities, despite both companies’ strong revenue figures. Meta’s 7% drop likely increased option premiums, making a neutral strategy like an iron condor appealing. This approach allows us to collect premium while predicting the stock will trade within a certain range. For Microsoft, its disappointing cloud growth could make a bearish put spread effective if the stock continues to struggle. The Fed’s cautious stance poses a challenge for the broader S&P 500. We expect the market to be very sensitive to the upcoming Personal Consumption Expenditures (PCE) inflation report for September, which the Fed closely monitors. Until that data is out, buying protective puts on an index ETF like SPY for late November could be a wise hedge against a market downturn. The noticeable differences in performance among the “Magnificent 7” create an ideal setup for a pairs trade. We can focus on Alphabet’s strength by going long on GOOGL calls while shorting a weaker name like META with puts. We’ve seen similar patterns before, such as in late 2018, when uncertainty from the Fed led to a market downturn where individual stock fundamentals mattered most. Create your live VT Markets account and start trading now.

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