The US stock market is getting a lift thanks to Google, whose shares have risen by 8%, and Apple, which has seen a 3.5% increase after a recent anti-trust court ruling. However, sectors like energy, finance, transportation, and industry are facing challenges today, along with the consumer sector. DollarTree’s shares fell by 8%, and McDonald’s is struggling to serve low-income customers. The market hasn’t maintained the rally from yesterday, as the news about Google was expected to promote further growth. Yet, worries about politics and tariffs have dampened excitement. Yields have come down from their previous highs, but the market remains cautious. September has historically underperformed, and the upcoming jobs report this Friday might add to the anxiety. The strong performance of a few tech giants like Google and Apple gives a false impression of market health. We should be careful with this limited leadership and think about defensive strategies. Buying put options on broad market ETFs like the SPY or on weaker sectors such as financials (XLF) can effectively protect against a market downturn. The struggles of low-income consumers, highlighted by DollarTree’s situation, raise serious concerns about the overall economy slowing down. Recent data shows that U.S. credit card delinquencies rose to 3.5% in the second quarter of 2025, the highest since 2012. This makes investing in long call options on consumer discretionary stocks risky in the upcoming weeks. With the important monthly jobs report arriving this Friday, we can expect increased volatility. August’s report indicated a cooling job market, with the unemployment rate rising to 4.1%. Traders are paying close attention to this release for signs of continued weakness. A long straddle strategy on the QQQ could be useful, as it benefits from significant price movements in either direction without needing to guess the report’s outcome. It’s important to remember that September is typically the worst month for stocks, with the S&P 500 averaging a 1.1% decline since 1928. This historical trend, along with the current market’s weak performance, is reminiscent of conditions before the market correction in late 2021. As a result, selling out-of-the-money call credit spreads could be a sensible way to generate income while betting on limited upside potential.

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