Dip buying returned after last week’s tariff worries, with indices bouncing back from Friday’s losses. A new agreement between Broadcom and OpenAI has generated positive feelings in the market. Over the weekend, the US and China both worked to ease trade tensions. US policymakers took the lead in stabilizing the situation. While confidence hasn’t fully bounced back, it seems that another trade war is unlikely for now.

Broadcom Gains from Deal

Broadcom has strengthened its role in tech thanks to its deal with OpenAI. This news is a welcome relief after the market turmoil on Friday, highlighting the ongoing demand for computing power. Further analysis points out the NZD/USD drop linked to global trade issues and the EUR/USD decline as the dollar strengthens. Other currency trends show the Australian dollar bouncing back as tensions ease, GBP/JPY breaking its losing streak, and USD/JPY increasing during a quiet market period. Details on the best Forex Brokers for 2025 include low spreads and broker suggestions for various currency pairs, including Islamic account options. Trading involves risks, so it’s important to do thorough research before investing. The opinions expressed in this article are those of the authors and are not meant as investment advice.

Market Volatility Opportunity

With tariff fears from last Friday easing, there’s a chance to benefit from reduced market volatility. The VIX, which briefly rose above 20 during trade war concerns, has fallen back to around 17, creating a favorable environment for selling premium. This could involve tactics like writing covered calls on tech stocks to earn income as the market recovers. We believe the reduction in tensions is necessary economically, as trade between the US and China reached a record $795 billion for the year ending August 2025. This deep connection indicates that a long-term conflict would be harmful, suggesting this dip is a buying opportunity instead of the start of a new bear market. For now, this reduces the need for costly long-term protective options on broad indices. The Broadcom and OpenAI deal highlights that the artificial intelligence race is a key theme in the market. The AI hardware sector has already grown over 40% year-to-date in 2025, and this news is likely to boost semiconductor and related technology stocks further. Traders might consider buying short-term call options on tech-heavy ETFs to take advantage of this renewed momentum. This pattern of sharp declines on trade threats followed by fast recoveries has occurred repeatedly during trade disputes in the late 2010s. History shows that while these relief rallies can be strong, sentiment can still be fragile. Using defined-risk strategies, like bull call spreads, allows for capturing gains while guarding against sudden market shifts due to geopolitical news. Create your live VT Markets account and start trading now.

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