The Dow Jones Industrial Average hit new record heights as traders shifted their attention from the AI tech rally to traditional stocks, particularly major banks and healthcare companies. At its highest point, the index rose by about 430 points, reaching an intraday peak of 48,419. This increase reflects a 4% rise over four days after a slight drop to 46,490. Key drivers of this growth included major banking stocks like Goldman Sachs, JPMorgan, and American Express, which all reached record highs. The materials and construction sectors, with companies like Caterpillar, also supported the index’s rise. However, worries about AI revenue remain, even though Lisa Su, the CEO of Advanced Micro Devices, predicts that AI demand could hit $1 trillion annually by 2030, suggesting significant investment in data centers is expected.

Government And Economic News

In government news, a temporary bill has passed that may prevent the longest federal shutdown in US history, waiting for a vote in the House of Representatives. The Federal Reserve’s mission is to ensure price stability and employment by adjusting interest rates according to inflation and job rates. Quantitative Easing aims to increase credit flow during crises, while Quantitative Tightening focuses on strengthening the US Dollar by stopping bond purchases. As the Dow Jones Industrial Average nears record levels, we observe a clear shift from AI-related technology stocks to established sectors like banking and healthcare. This trend suggests that traders may want to consider strategies that take advantage of the ongoing strength in these traditional areas. Buying call options on financial and industrial ETFs, or on leading stocks like JPMorgan and Caterpillar, could be a wise choice. This shift is backed by recent economic data, as the latest Consumer Price Index report for October 2025 showed inflation easing to 2.8%, supporting market expectations. With the Federal Reserve likely to keep interest rates steady in their final meeting this year, pressure on high-growth tech valuations may continue. This environment makes value-oriented stocks, which typically have strong current cash flows, a more attractive option for investment.

Market Strategies For Traders

The potential resolution of the long government shutdown is also easing market tension, reducing the CBOE Volatility Index (VIX) to near 14. Such low volatility lowers the cost of purchasing options, encouraging traders to buy protective puts on the broader market as a safeguard against unexpected downturns. Alternatively, traders might consider selling cash-secured puts on reliable Dow components that have recently dropped, leveraging the stability. We’ve seen this type of narrow rally before, where a few sectors drive an index up while the rest of the market lags behind. Similar patterns occurred in late 2021, where a shift from growth to value preceded broader market fluctuations. Therefore, focusing on options trades within sectors showing clear momentum, like financials, seems to be the most prudent strategy for the coming weeks. Create your live VT Markets account and start trading now.

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