US equity futures rise as June CPI data shows higher inflation in both headline and core categories
by VT Markets
/
Jul 15, 2025
**Earnings Season Begins with Strong Performances**
Earnings season has kicked off, providing a detailed look into the market. We see a clear difference: money-center banks and tech companies are performing well, but there’s a warning from a bank in San Francisco about net interest income. This market isn’t just about broad index futures. The Nasdaq 100 is doing particularly well. So far, about 20% of S&P 500 companies have reported their earnings, and FactSet shows that over 80% have exceeded earnings per share estimates. However, revenue increases are not as strong. This indicates strong margins at the top, but there may be weak demand below the surface.
To navigate this, we are structuring pairs trades. We’re buying call options on top-performing tech ETFs like QQQ while simultaneously buying put options on regional banking ETFs like KRE. This strategy takes advantage of the initial market reactions and protects against a larger downturn. It allows us to benefit from the widening gap between the winners in the market and those struggling with the interest rate environment.
**Anticipating Market Volatility with Tariff Policies**
The market’s reaction to June’s inflation data is a classic case of “sell the rumor, buy the fact,” but we think this may hide upcoming volatility. The numbers were mild enough to stop the Federal Reserve from making a quick rate cut, leading the market to adjust its expectations quickly. The CME FedWatch Tool shows that the chance of a September rate cut dropped from over 65% to below 55% right after the data came out.
For traders who deal in derivatives, this is a chance to sell some near-term volatility. With the immediate news now processed, we expect a period of stable prices in the main indices. This makes strategies like short-term iron condors on the SPX appealing for generating income in the next two to three weeks.
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by VT Markets
Jul 15, 2025
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