Tech showed early strength versus SPY on the daily chart. The S&P 500 and Nasdaq fell after a mix of higher inflation and weaker growth, then bounced back.
Trading through Friday brought sharp intraday swings in tech, similar to Thursday. The plan was to reduce position size and use support and resistance in a trending market.
Tech Relative Strength Versus Spy
The dollar moved back toward 98 as geopolitical uncertainty rose. The text also points to a sector-by-sector view and where the market sits in the current bull run, including sector impacts.
A Supreme Court ruling on tariffs was widely expected and did not move markets much right away. Some industries with heavy import exposure, including China-linked imports, were set up to benefit.
Focus then shifted to a broad tariff increase. The rate rose from 10% to 15% on all imports, which triggered a market reaction.
We’re seeing a clear split: tech is holding up better than the S&P 500 on the daily chart. Over the last five sessions, QQQ beat SPY by nearly 1.5%, even with the sharp selloffs. This may lead options traders to consider call spreads on tech indexes to take advantage of the relative strength while keeping risk defined.
Managing Risk In Elevated Volatility
Intraday volatility is high and makes stops harder to place. With the VIX near 24 (up from the low 20s last month), option premiums are more expensive. That argues for smaller position sizes. For traders selling premium, spreads placed well outside recent ranges can help limit risk.
This choppy action is a direct response to the latest CPI report. Inflation came in hotter than expected at 3.8%. In 2025, markets often made similar quick moves when inflation surprised to the upside. That pattern suggests the Fed is still the biggest driver of sentiment. It also means short-dated options around data releases can be especially risky.
The US Dollar Index is also holding near 98 as investors move into safe-haven assets amid ongoing geopolitical tensions. A strong dollar can hurt earnings for large-cap tech companies with major overseas revenue, which came up often in 2025 earnings calls. If the dollar keeps rising, it could limit the current tech rally.
The decision to raise tariffs to 15% across the board adds a meaningful headwind for certain industries. Import-heavy sectors like consumer electronics and apparel may see margin pressure. That setup is similar to the 2018–2019 trade disputes, when some retail stocks lagged the market by more than 10%. Derivatives traders may want to watch for weakness here, and consider put options on related ETFs as either a hedge or a directional trade.
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