The major U.S. stock indices are up today, with the NASDAQ index striving for yet another record close. Currently, the Dow is up 43.65 points, or 0.16%, at 44,298.43. The S&P index has gained 5.54 points, or 0.09%, and is at 6,269.24. The NASDAQ has increased by 36.78 points, or 0.18%, now sitting at 20,767.27.

Small Cap Index Movement

The small-cap Russell 2000 has risen by 5.08 points, or 0.24%. Netflix will announce its earnings after the market closes; its shares are down $0.34, or -0.19%, trading at $1,247.97. TSMC shares are up $5.69, or 2.40%, priced at $243.25. The company reported earnings per share of $2.61, exceeding the estimate of $2.38. TSMC’s revenues hit $31.79 billion, beating the expected $30.21 billion. With the market trending upwards, traders should stay positive, especially in the technology sector. The NASDAQ’s record push is mainly driven by a few large tech companies, which now make up over 30% of the S&P 500’s total market value. This situation supports a strategy focused on index derivatives like QQQ calls.

Semiconductor Industry Update

Strong earnings from the Taiwanese semiconductor company signal good news for the entire AI supply chain. This result confirms the high demand for advanced chips, a trend that has pushed the VanEck Semiconductor ETF (SMH) up over 50% this year. We see this as an opportunity to start or add to bullish positions on semiconductor derivatives. As we await the upcoming earnings announcements, using a defined-risk strategy is wise. The options market indicates a potential 9% move in the underlying stock, making it a good time for those expecting high volatility. We suggest considering a long straddle or strangle to benefit from large price swings after the announcement. We are also monitoring the small-cap index for signs of a broader rally. Historically, when large-cap stocks do well for an extended period, smaller, more domestically-focused companies often catch up if economic conditions improve. Traders could explore longer-dated call options on the IWM ETF as a way to capitalize on this potential shift in the coming months. Create your live VT Markets account and start trading now.

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