US stock indices are starting off strong. The NASDAQ index hit record closing levels every day last week and might set another record today. The S&P index dipped slightly on Friday. However, if it trades above 6297.36, which is currently at 6314.22, it could reach a new high.

Dow And Nasdaq Performance

Recent market data shows that the Dow Industrial Average rose by 60 points, or 0.14%, reaching 44401. The S&P index gained 17.37 points, or 0.28%, now at 6314.22. The NASDAQ index increased by 89 points, or 0.42%, to reach 20982.70. The Russell 2000 went up by 10.59 points, or 0.47%, to 2250.76. For more insights into forex, stocks, bonds, and crypto, it’s a good idea to regularly check financial news platforms. With the NASDAQ 100 up over 17% this year, we suggest riding the positive wave in technology. Traders might want to buy call options on tech-focused ETFs to take advantage of any further gains. This strategy taps into the strong trend that has led to consecutive records.

Market Volatility And Federal Reserve Stance

However, we should also think about the risk of a pullback from these high levels. The CBOE Volatility Index (VIX) is near a low of 12, making protective put options a cost-effective way to guard against a sudden drop. Since market gains depend mainly on a few large stocks, it’s wise to hedge against a broader market decline. The Federal Reserve recently indicated only one interest rate cut may happen this year, introducing some uncertainty. Powell’s cautious position could dampen market excitement in the coming weeks, especially if inflation data stops improving. In this situation, strategies like call spreads, which limit risk while allowing for profit from moderate gains, could be beneficial. We also see potential outside the main indices, particularly among smaller companies. The Russell 2000 is more affected by interest rate policies, and any future shift toward a more accommodating policy from the central bank could help it outperform. Exploring derivatives on small-cap ETFs might be a good way to capitalize on a broader market rally. Create your live VT Markets account and start trading now.

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