US equities continued to outperform, with the S&P 500 up 0.12% and the NASDAQ up 0.20%, both reaching new record highs. This happened while global risk sentiment stayed cautious.
The Mag-7 rose 0.64% ahead of results from Alphabet, Microsoft, Amazon and Meta due the next day. Nvidia led the group, rising 4.00%.
Nvidia Market Cap Milestone
Nvidia reached a record market capitalisation of $5.26trn. Its market value has increased by $1.25trn over the past four weeks.
The Philly semiconductor index fell 1.00% after an 18-session winning streak. During that run, the index gained 47.2%.
The article was produced with the help of an AI tool and reviewed by an editor.
US stocks are pushing to new records, but this strength is concentrated in just a few big tech companies while the rest of the market is more cautious. We see this as a reason to consider strategies that play this narrow leadership, perhaps using call options on the Nasdaq 100. With the VIX, a measure of market fear, currently sitting at a relatively low 13.5, buying these options to capture further upside is not overly expensive.
Options Strategies For Earnings
Nvidia’s incredible $1.25 trillion gain over the last month has pushed the implied volatility on its options much higher than that of the broader market. This presents an opportunity for traders to sell premium, for instance, through covered calls, betting that the stock’s rapid ascent may slow down. Others might see the upcoming earnings season as a catalyst for even bigger moves, making straddles a viable way to profit from a breakout in either direction.
The end of the 18-day winning streak for the Philly semiconductor index is a signal that this part of the tech sector may be overextended. We saw a similar situation in mid-2025, where a powerful rally in chips was followed by a month of sideways consolidation. This suggests it may be a good time to buy put options on a semiconductor ETF like SOXX as a hedge against a potential pullback.
With earnings from giants like Microsoft, Alphabet, and Meta due within the next two weeks, a spike in short-term market volatility is almost certain. This is a classic setup for using strangles, which can profit from a large price swing without needing to correctly guess the direction of the move. How the market reacts to these results will likely set the tone for whether this tech rally can continue into the summer.
