The major US stock indices have lost their earlier gains. The NASDAQ index, once up by 327.81 points, is now down 5 points, or 0.02%, at 21,123. The S&P index has dropped 16.38 points, or 0.26%, to 6,346.52 after an earlier increase of 64.12 points. The Dow industrial average has fallen by 237.15 points, or 0.54%, to 44,220, having gained 204.54 points earlier. Amazon and Apple are in focus as they prepare to report earnings after the market closes. Amazon’s shares are up by 1.49%, while Apple’s shares have dipped by 0.53%. Microsoft shares have risen by $20, or 3.96%, although they had previously climbed as much as $42.21 during the day’s highs. Meta’s shares are up by $80, or 11.53%, hitting session highs with an increase of $89.54.

The Nasdaq Decline And Stock Performances

The NASDAQ index has dipped further by 30 points, or 0.14%, and the S&P has slipped by 23 points, or 0.37%. Figma’s IPO opened at $85 and is now trading at $109.58, significantly increasing from its starting price of $33. The market’s inability to maintain its morning gains is a concerning sign for the weeks ahead. We see a loss of confidence as sellers take charge, turning a promising session into a negative one for key indices. This shift indicates that buyers are starting to tire. With Amazon and Apple announcing earnings later, increased volatility is likely. The CBOE Volatility Index (VIX) has surged over 12% today, reaching 17.5, which indicates that the options market anticipates significant price fluctuations. This is the VIX’s highest level in over a month, indicating rising fear. For derivative traders, it may be time to seek protection. Buying puts on major market ETFs like the SPY and QQQ could help save against a downturn that might last longer than just one session. Today’s price movements suggest the beginning of a broader risk-off trend. This pullback occurs even though the S&P 500 is up over 15% since the start of 2025, which suggests profit-taking. A similar market weakness appeared in late summer 2023 after an impressive first-half rally. History shows this erratic behavior could continue into August.

Market Weakness And Trading Strategies

Weakness among major stocks like Microsoft and Meta, which have given back a lot of their early gains, is another bearish sign. Traders might think about selling call spreads on these stocks, anticipating their short-term upside is now limited. Their inability to push the market higher shows a significant weakness in the rally. However, the strong performance of the Figma IPO indicates that speculative money is still in the market. This creates a tricky situation where the overall market is weak, but certain stocks can still generate excitement. Traders need to be selective, as not all stocks will move down together. In the coming weeks, the smart approach is to be cautious with long positions and consider strategies that benefit from either a drop in prices or an increase in volatility. Using options collars to protect existing stock positions could be a wise way to remain in the market while guarding against a more significant correction this summer. Create your live VT Markets account and start trading now.

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