The main US stock indices have lost their earlier gains. The NASDAQ index, which went up by 327.81 points, is now down 5 points, or 0.02%, at 21,123. The S&P index dropped by 16.38 points, or 0.26%, sitting at 6,346.52 after an earlier increase of 64.12 points. The Dow industrial average fell by 237.15 points, or 0.54%, to 44,220, having previously gained 204.54 points. Amazon and Apple are in focus as they are set to report earnings after the market closes. Amazon’s shares have risen by 1.49%, while Apple’s have decreased by 0.53%. Microsoft shares gained $20, a 3.96% increase, although they hit session highs of $42.21 at one point. Meta’s shares rose by $80 or 11.53%, reaching a peak increase of $89.54.

The Nasdaq Decline And Stock Performances

Recent updates show that the NASDAQ index has dropped by another 30 points, or 0.14%, and the S&P has fallen by 23 points, or 0.37%. The Figma IPO started strong, opening at $85 and now trading at $109.58, up from its initial price of $33 a share. Today’s inability of the market to maintain its morning gains is a warning sign for the weeks ahead. We see less confidence as sellers take charge, turning a potentially strong session into a negative one for major indices. This shift points to buyer fatigue. With Amazon and Apple set to announce earnings after the close, we can expect increased market volatility. The CBOE Volatility Index (VIX) jumped over 12% today to reach 17.5, showing that traders are expecting significant price movements. This is the highest level for the VIX in over a month, indicating rising fear. For those trading derivatives, it may be wise to buy protection. Options like puts on broad market ETFs such as SPY and QQQ can protect against a downturn that could extend for more than one day. Today’s market activity suggests the beginning of a broader risk-off trend. This pullback occurs despite the S&P 500 being up over 15% since the start of 2025, indicating classic profit-taking. We’ve seen a similar pattern of market weakness in late summer 2023 after a strong rally in the first half. Historically, this kind of volatility might persist through August.

Market Weakness And Trading Strategies

The decline in major companies like Microsoft and Meta, which have reversed much of their initial gains, signals further bearish sentiment. Traders may want to consider selling call spreads on these stocks, suggesting limited near-term upside. Their inability to drive the market higher is a significant issue for the rally. However, the strong performance of the Figma IPO indicates that speculative investment has not vanished from the market. This creates a challenging situation; while the broader market is weak, certain stocks still attract major interest. Traders need to be selective and not assume all stocks will move in unison. In the coming weeks, it’s wise to be cautious with long positions and explore strategies that profit from falling prices or rising volatility. Employing options collars to safeguard current stock positions can be a smart way to remain invested while shielding against a deeper market correction this summer. Create your live VT Markets account and start trading now.

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