US equities rose as oil prices fell and stagflation concerns eased. The S&P 500 gained 1.46%, the Nasdaq rose 2.02%, and the Mag 7 added 2.00%, with all three reaching new highs.
Chipmakers led the move, with AMD jumping 18.61% after reporting strong demand for AI agents. The Philadelphia Semiconductor Index climbed 4.48%, taking its year-to-date gain to 62%.
Credit Spreads Tighten
In credit markets, US high-yield spreads tightened by 4bp to their narrowest level in three months. The article notes it was produced using an AI tool and reviewed by an editor.
With the S&P 500 and Nasdaq pushing to new highs, the upward momentum is being driven by easing stagflation fears and optimism in artificial intelligence. This suggests a risk-on environment is taking hold. We believe traders should consider buying call options or bullish call spreads on major indices like the QQQ to participate in the ongoing rally.
The semiconductor sector is the clear leader, with the Philadelphia Semiconductor Index now up over 25% year-to-date. This strength, fueled by massive AI-related demand, indicates that the most aggressive growth is concentrated here. This makes long call positions on individual chipmakers or the SOXX ETF an attractive strategy for capturing this targeted outperformance.
This rally has also crushed market volatility, with the VIX index currently sitting near a historically low level of 13. This is a stark contrast to the volatility spikes we saw during the recession fears of 2025. Selling out-of-the-money put spreads on stable, large-cap stocks could be an effective way to collect premium in this low-fear environment.
Positioning For Continued Gains
We see confirmation for this positive outlook in other asset classes, as high-yield credit spreads have tightened to near 320 basis points. This move shows bond traders share the equity market’s confidence and is helped by WTI crude oil settling near $78 a barrel, down from levels that caused inflation scares last year. Given this backdrop, going long E-mini S&P 500 or Nasdaq 100 futures contracts is a direct way to position for continued gains in the weeks ahead.
