Equity markets retraced Friday’s sell-off as the brief Israel–Iran clash eased, leaving benchmarks close to levels seen earlier in the week. Tech-led indices resumed their advance, with the Nasdaq 100 and Japan’s Nikkei 225 rebounding and appearing positioned to move beyond the recent dip.
Volatility also reversed, as the latest rise in the VIX echoed May’s pattern and then faded, with market positioning tilting towards adding equity risk rather than reducing it. The commentary referenced claims from Donald Trump that a deal is close, even as hostilities persisted. Separately, IG’s chief market analyst Chris Beauchamp has been at the firm for four years and has appeared across major financial TV outlets, including the BBC and Sky News.
Market Resilience And Tech Leadership
It looks like we are back to business as usual after last week’s brief scare over a potential EU trade tariff escalation. The market’s resilience is impressive, with the Nasdaq 100 having already recovered over 80% of its losses from that dip. Tech stocks are once again leading the charge, suggesting the underlying upward trend remains firmly in place.
Volatility Patterns And Trading Strategies
Last week’s spike in the VIX, which briefly touched 18, has quickly reversed course and is now trading back around 13.5. We are seeing this as another opportunity to sell volatility rather than a signal to reduce risk. This pattern is similar to the one we saw during the brief banking sector scare in March 2026, where the spike was very short-lived.
Investor confidence appears bolstered by solid economic data, such as the May jobs report which showed unemployment holding steady at a healthy 3.7%. This resilience suggests that traders are viewing geopolitical or policy flare-ups as temporary noise. With the Federal Reserve’s tone remaining neutral, the environment seems supportive for risk assets.
Given this dynamic, we believe traders should consider strategies that benefit from declining volatility and further market stability. Selling out-of-the-money puts or implementing bull put spreads on major indices could be advantageous. These positions capitalize on the premium decay that accelerates as fear quickly subsides from the market.
