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VT 
The technology sector thrives due to gains from Tesla and Oracle, despite mixed performances in other areas.
The technology sector is driving the stock market forward, showing strong performances from key companies. Advanced Micro Devices (AMD) has risen by 0.75%, while Micron Technology (MU) has dropped by 4.63%. Oracle (ORCL) and Palantir Technologies (PLTR) have gained 1.93% and 2.36%, respectively, and Microsoft (MSFT) is up by 0.89%.
In the consumer cyclical sector, Amazon (AMZN) has increased by 0.92%, and Tesla (TSLA) has seen a 2.39% rise. These gains indicate confidence in these important consumer brands, which play significant roles in the market.
Miran’s upcoming CNBC appearance may share his views on expected rate cuts and strategies for response.
Stephen Miran expects the Federal Reserve to cut rates by 50 basis points at each meeting this year, based on his forecast. This view suggests he might support Trump’s economic policies.
Miran will be on CNBC soon, where he may share more about his economic views. Many are curious how he will handle any criticism during the interview.
Addressing The Market
A Fed governor is now advocating for 50 basis point cuts at every remaining meeting in 2025. The front end of the curve is the best place to take action. We should consider increasing our long positions in SOFR futures for the December 2025 and March 2026 contracts. Comments like these, whether they’re serious or just a trial balloon, will push the market to expect a faster pace of rate cuts. This stance is quite bold, especially since the August 2025 CPI report showed inflation remains stubborn at 2.8%, higher than the Fed’s target. However, with the latest jobs report indicating payroll growth slowing to 150,000 and unemployment rising to 4.2%, he has some justification for his dovish perspective. The market currently anticipates only about 75 basis points of cuts by year-end, revealing a trading opportunity. We see this as a driver for a notable spike in interest rate volatility, which has been relatively low this year. The MOVE index, an essential gauge of bond market volatility, is close to its lows for 2025, making long volatility strategies attractive. Buying calls on the VIX before the next FOMC meeting could be a smart way to prepare for incoming market uncertainty.Pressure On The US Dollar
If the Fed cuts rates so aggressively while other central banks like the ECB stay firm, it would put a lot of pressure on the US dollar. This situation reminds us of late 2018 when the Fed halted its rate hikes, resulting in a temporary dip in the dollar. We should think about buying inexpensive, out-of-the-money call options on EUR/USD that expire in December. The equity market will likely see this as a strong signal, especially for tech and growth stocks sensitive to interest rates. The Nasdaq has been trading in a narrow range for most of the third quarter of 2025. This could be the spark needed for a breakout, so we are looking at call spreads on the QQQ to prepare for a potential year-end rally. Create your live VT Markets account and start trading now.Apple and Tesla drive Nasdaq to a new record, while chipmakers lag behind.
The Nasdaq index has hit new all-time highs, rising by 0.3%. This increases mainly come from big companies like Apple, which rose 1.6%, and Tesla, which increased by 1.5%. Intuit also gained, climbing by 2.4%.
On the other hand, chipmakers are struggling. Micron dropped by 3.5%, Broadcom decreased by 1.9%, and Intel fell by 1.4%. These changes show the mixed performance in the tech sector.
The Nasdaq Rally
The Nasdaq is reaching new heights, but the rally is quite narrow. The gains are mainly from large consumer tech companies like Apple and Tesla. The declining semiconductor stocks highlight a key trend to watch in the coming weeks. Apple’s recent surge seems linked to the positive buzz around the new iPhone 17. Supply chain reports indicate that pre-orders are around 12% higher than expected. For traders, this means there could be more gains ahead, making bullish call spreads on Apple a smart move. In contrast, the decline of companies like Micron and Broadcom points to increasing economic worries. The latest purchasing managers’ index (PMI) data for August dropped to 49.1, signaling a contraction in manufacturing, which is a big market for semiconductors. This follows a trend seen in the second half of 2024 when industrial demand started to weaken.Trading Opportunities in the Current Market
This mixed performance creates a clear trading opportunity for options traders. Consider buying call options on the Nasdaq 100 ETF (QQQ) to invest in strong tech companies while purchasing put options on the semiconductor ETF (SOXX) to bet against the industry. This approach targets the performance gap between flourishing consumer tech and struggling chip makers. As the market reaches all-time highs, it’s also important to think about risk. The Nasdaq’s volatility index, the VXN, has dropped to 19.5, a level we haven’t seen since the spring rally. This makes protective put options cheaper, providing an affordable way to safeguard long portfolios from a potential market downturn. Create your live VT Markets account and start trading now.Futures for US stocks suggest positive openings, but Intel shares drop despite comments from the president
US stock futures suggest possible gains when the market opens. Both S&P 500 and Nasdaq futures are up by 0.2% before trading starts.
The President recently announced the government’s purchase of Intel shares on social media. However, Intel’s stock has fallen by 1% in pre-market trading.
Market Volatility Observations
We’re expecting a slightly positive start, which fits with the market’s calm after the Federal Reserve decided not to raise rates. The inflation rate for August 2025 came in at 2.8%, easing worries and keeping market volatility low. This situation might benefit strategies like selling options on broad indexes, such as SPX. The President’s announcement about buying Intel shares is significant, leading to a split between Intel and the wider market. The drop in Intel’s stock price suggests investors think this could be a bailout rather than a smart investment, especially given recent warnings about supply chains. Implied volatility for Intel options has surged to over 45%, offering a great opportunity for traders expecting big price movements. This situation sets up a clear trading contrast in the coming weeks. While the VIX stays below 15, indicating a relaxed market, specific political risks in the semiconductor sector are rising sharply. This reminds us of the sector-specific shifts we experienced in 2023, where individual stocks moved differently from index trends.Trading Opportunities
One strategy could be to express a long volatility view on the semiconductor sector using options from an ETF like SMH, or directly on Intel. You might consider buying straddles or strangles on INTC to benefit from a significant move in either direction. This can be combined with a neutral-to-bearish approach on the S&P 500, given the market’s subdued response to recent economic data. Create your live VT Markets account and start trading now.NVIDIA’s options expiry affects trading strategies, highlighting range behavior over aggressive moves today
NVIDIA closed at $176.24 and is currently trading around $176 in pre-market, experiencing a slight decline of -0.14%. Today’s session is focused on NVDA options expiry, which often influences pricing based on implied moves and the actual stock performance.
In the last 20 trading days, NVDA’s actual price changes have been smaller than expected in three out of four cases. Around the earnings in August, high implied volatility did not lead to significant stock movement, which benefited option sellers. When actual moves exceeded the implied ones, calmer sessions usually followed, except on September 17 and 18. This indicates more stable price behavior rather than dramatic swings.
Expected NVDA Range
Today, the expected NVDA range, calculated using a 10-day average of implied moves, is approximately between $172.6 and $179.5, which represents a ±2.0% change. Extending this to a 20-day view raises the average to ±2.5% due to earnings adjustments. Key price levels include a developing VWAP of $175.91 and resistance between $177.06 and $177.75. NVIDIA’s strategic capital changes involve investments in Intel and AI infrastructure, showing plans for growth but increasing execution challenges. Efforts in AI and networking are expanding, especially amid US-China tensions that impact growth and policies. Although there is optimism for innovation, mixed news about policies suggests that while dips may attract buyers, significant breakout confirmations are needed, particularly on expiry days. Given that NVIDIA’s actual price moves have been less than the implied moves about 75% of the time recently, strategies that capitalize on this compression are advisable. This trend, where implied volatility is consistently higher than the stock’s performance, points to a favorable environment for selling options premium. This has been observed frequently over the past year, especially between major product announcements. In the upcoming weeks, consider selling covered calls against long stock holdings as NVIDIA nears resistance around $177 to $178. CBOE data shows that the 30-day realized volatility for NVIDIA has been, on average, 15% lower than the implied volatility since Q2 2025, supporting this approach. Selling out-of-the-money put spreads near support around $174.40 could also work if we expect the stock to stay within a range.News Flow and Strategy
The current news landscape encourages a cautious yet optimistic stance, blending strong AI-related acquisitions with geopolitical risks from US-China trade tensions. Recent reports of the Commerce Department reviewing chip export rules may limit dramatic rallies, making significant breakouts above $180 tough to maintain. These policy concerns should be viewed as catalysts for range-trading strategies, as they may restrict upward price movements. As we approach the monthly options expiration in October, we anticipate dealers will keep the stock around high-volume strike prices like $175 and $180. This supports the idea of fading moves near the edges of the expected range, similar to the dynamics seen in summer 2024, where the stock lingered around key levels for weeks ahead of a major event. While our primary strategy focuses on range trading, we must remain ready for exceptions. Instances where actual moves exceeded the implied ones, such as on September 17 and 18, remind us that significant news can disrupt established patterns. Therefore, purchasing low-cost, out-of-the-money options could be a smart hedge against unexpected policy news or competitor setbacks. Create your live VT Markets account and start trading now.Trump and Xi discuss TikTok agreement during trade talks, fostering optimism
The recent phone call between Trump and Xi focused on the TikTok deal and is part of broader trade talks. We expect this conversation to yield positive remarks about trade, and it’s likely to influence the rising Chinese stock markets.
Economic Implications of US-China Relations
If U.S.-China relations improve, we could see less market volatility in the weeks ahead. This may make selling volatility an attractive strategy, such as shorting VIX futures or selling credit spreads on the SPX index. Currently, the VIX is around 17, and any positive statement could lower it to around 14, its lowest point this year. The booming Chinese stock market offers a significant opportunity if the trade news is favorable. The CSI 300 Index has already gained over 12% in the last quarter, driven by strong domestic policies. We should consider purchasing call options on ETFs focused on China, like FXI or KWEB, to benefit from the momentum that a positive trade headline could create. For U.S. investors, companies that rely heavily on revenue from China are worth watching. Remember how stocks like Apple, Boeing, and semiconductor companies surged during the trade disputes from 2018 to 2020 at any sign of progress. Buying short-dated calls on these stocks is a direct way to capitalize on good news from the talks.Currency and Market Impact
In addition to stocks, we’re also keeping an eye on currency movements, especially the U.S. dollar compared to the Chinese yuan. An easing of trade tensions could boost the yuan, likely driving the USD/CNH exchange rate below 7.25, a level it has struggled to break. This outlook is supported by recent data showing that China’s manufacturing PMI exceeded expectations last month at 51.5. Create your live VT Markets account and start trading now.The SEC proposes replacing quarterly earnings reports with semi-annual ones for companies.
The US Securities and Exchange Commission (SEC) is considering a change that would move earnings reports from quarterly to semi-annual. This comes after a request from President Trump, and SEC Chairman Paul Atkins may propose a rule change.
The Republicans hold a 3-1 voting majority, which means a simple majority could approve this shift. If it happens, companies would update investors less often about their earnings.
Reducing Regulatory Burdens
This potential change is aimed at easing regulatory burdens and allowing managers to focus more on running their companies. President Trump pointed out how short-term thinking differs from long-term planning in other countries like China. Chairman Atkins mentioned that this is still just a proposal, and final decisions haven’t been made yet. There’s still time for more discussions and possible lobbying before anything is finalized. As of September 19, 2025, this proposal introduces uncertainty, creating some reactions in the derivatives market. We anticipate an overall rise in implied volatility as the market adjusts to longer periods without updates from companies. The CBOE Volatility Index (VIX), known as the market’s “fear gauge,” has already increased by over 12% this week due to this news.Adjusting Strategies
Traders should start changing their strategies away from the usual quarterly earnings timeline. Options set to capitalize on specific earnings events, like those in October or January, may see their premiums adjusted or even eliminated. Therefore, we are shifting our attention to longer-dated options that can take advantage of the new semi-annual reports. Hedging costs are likely to increase, as options premiums will need to rise to cover the extended risk between reports. Reflecting on early 2020’s market chaos, the VIX hit above 80, showing how uncertainty raises the cost of portfolio insurance. This regulatory change, while not a black swan event, illustrates how uncertainty can still elevate option prices. We can also learn from European markets, which switched to semi-annual reporting in 2015. Their experience shows volatility tends to be low for long periods, followed by large price moves around major reporting dates. This indicates a new trading environment where waiting can lead to significant rewards before major, high-stakes events. The volatility around these new semi-annual reports is likely to be much higher than what we have seen before. Historically, S&P 500 stocks have seen an average volatility increase of about 77% on quarterly earnings days. We can now expect this effect to be even more pronounced as six months of corporate performance and surprises hit the market all at once. Create your live VT Markets account and start trading now.Retail sales in Canada drop by 0.8% in July, contrary to expected 1.5% increase
In July 2025, Canadian retail sales fell by 0.8%, missing the expected increase of 1.5%. The previously reported gain for the prior period was also downgraded from 1.5%.
When excluding automobiles, sales dropped by 1.2%, compared to the expected decline of 0.7%. The prior figure had shown a rise of 1.9%. Sales fell in eight out of nine subsectors, highlighting widespread struggles in retail.
Advance August Data
Advance data for August indicates a 1.0% growth in retail sales. However, RBC cardholder data reflected a 2.2% drop in overall sales, while core sales increased by 0.4%. Details reveal a slight gain of 0.2% at motor vehicle and parts dealers in July. The food and beverage sector saw a 1.3% decline, with supermarkets experiencing a significant 2.5% drop. Clothing sales also fell by 3.2%. Statistics Canada provided an upbeat advance reading of a 1.0% increase. Some North American retailers are seeing Canadian consumers remaining strong, which contrasts with trends in the USA. The unexpected drop in July retail sales suggests that Canadian consumers are weaker than previously thought. This raises questions about the health of our economy and casts doubt on the strength of Q3 growth. The drop in nearly every category indicates a broad weakness.Bank of Canada’s Response
This report gives the Bank of Canada a strong reason to hold its current stance and adopt a gentler approach. Following the August CPI data that showed core inflation easing to 2.9%, the disappointing consumer spending figures lessen the need for any further interest rate hikes. We may see overnight index swaps adjust, reducing the chances of another hike in 2025 while increasing the probability of rate cuts in early 2026. For the Canadian dollar, July’s poor performance mixed with the strong August estimate creates significant uncertainty. This situation sets the stage for more volatility in the USD/CAD pair, which has been trading around 1.3700. Options traders should brace for a breakout, as implied volatility is likely to rise while the market assesses whether July was an outlier or the start of a trend. A similar situation of conflicting data happened in late 2023, leading to a spike in volatility before the Bank of Canada confirmed a pause on rate hikes. Given the extent of the July miss, traders might want to consider buying downside protection for the loonie, such as calls on USD/CAD, to guard against the August advance number being overly optimistic when the final report is released next month. This slowdown also negatively affects Canadian stocks, especially those focused on consumers and the banks financing them. Weakness in supermarket and clothing sales directly impacts the retail sector, making it likely that there will be increased interest in buying puts on the S&P/TSX 60 Index to protect against a broader economic downturn. Create your live VT Markets account and start trading now.Kashkari shows growing confidence that the impact of tariffs on inflation could be temporary and manageable.
Minneapolis Fed President Kashkari is more confident that the effects of tariffs on inflation will be short-lived. He noted there is still uncertainty about how many more rate cuts might be needed to maintain a neutral stance. Even if short-term rates are lowered, long-term rates may not decrease.
Kashkari pointed out that key inflation factors, like housing and non-housing services, seem to be on the decline. He also commended Powell for fostering strong agreement within the Fed, emphasizing that outside political influences did not affect their recent discussions.
### Monitoring The Labour Market
While the labor market isn’t weak, Kashkari stressed that the Fed must keep a close eye on it. The overall sentiment hints at more rate cuts possibly happening this year, which gives some confidence.
Recent statements indicate a growing belief that tariff-related inflation is just a temporary issue. This perspective supports market expectations for two additional rate cuts before the year wraps up. As a result, Fed funds futures suggest there’s over an 85% chance of a 25-basis-point cut at the November meeting.
This cautious approach is favorable for equity markets, which tend to do well with lower interest rates. It may be wise to consider buying call options on major indices like the S&P 500 or selling put spreads to earn premium with limited downside risk. The VIX, currently around 14, might decline further as Fed policy becomes clearer and more accommodating.
An intriguing point is that long-term rates might not fall along with short-term rates. This could lead to a yield curve steepening trade, allowing us to benefit from the widening gap between 2-year and 10-year yields. A common strategy is to go long on front-end rate futures while shorting longer-duration Treasury futures.
### Fed’s Confidence In Inflation Metrics
The Fed feels optimistic due to cooling core inflation metrics. The latest Core PCE reading for August 2025 was at 2.6%. The labor market is also starting to soften, with job growth slowing to around 150,000 jobs last month and unemployment rising to 4.1%. These numbers provide the Fed the flexibility to ease policy without fearing an overheating economy.
This situation mirrors the approach used in 2019 when the Fed shifted from increasing rates to cutting them due to global growth concerns. That “mid-cycle adjustment” gave a significant boost to risk assets until the end of that year. Historical patterns suggest a positive environment for equities in the upcoming months.
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In 2025, strong data prompts a rally in assets despite market doubts about the Fed’s forecast.
In September 2024, the Federal Reserve lowered interest rates by 50 basis points to tackle concerns about a slowing labor market and disinflation. They projected two more cuts by the end of the year and two additional cuts for the next year. However, the market anticipated three cuts by year’s end and four more the following year. Strong US data and a robust Non-Farm Payroll (NFP) report in October led to hawkish changes in the market, driving a rally in the US dollar and rising Treasury yields.
By September 2025, the Fed cut rates again by 25 basis points because the labor market continued to slow, while inflation rose. They predicted two additional cuts by year-end and one more the next year, but the market was priced for nearly three cuts in the following year. After the Fed’s decision, lower-than-expected US jobless claims pushed Treasury yields and the US dollar higher. Upcoming US economic data, including PMIs, Jobless Claims, and the NFP report, will be crucial. Strong data could lead to a hawkish shift in interest rates, benefiting the US dollar and Treasury yields, while weak data might reinforce the market’s current views, putting pressure on the dollar and yields.
