Tech Surge Leads Market Rally As Volatility Remains Elevated
Tech Surge Leads Market Rally As Volatility Remains Elevated
By:JJ Kinahan
Forecasting woes and supply chain shifts dominate earnings season with no clear trend as volatility dictates strategy
- Tech stocks are driving the rally amid broader market uncertainty and volatility.
- Corporate forecasting is challenged by geopolitics, tariffs and supply shifts.
- Volatility is persisting, and investors should adjust risk strategies.
Stocks rallied broadly yesterday, led by strong gains in the tech sector. The Nasdaq Composite surged 2.75%, while both the S&P 500 and the Russell 2000 added 2%. The Dow Jones Industrial Average climbed 1.2%, and 10 of the 11 sectors in the S&P 500 closed higher, with only consumer staples ending the day in the red.
As earnings season progresses, one trend is becoming clear—companies are finding it increasingly difficult to provide accurate forecasts. This issue was first evident with United Airlines (UAL) and has continued with names like Alphabet (GOOG) , American Airlines (AAL) , PepsiCo (PEP) and Procter & Gamble (PG)
Even companies reporting strong results are warning about headwinds—tariffs, shifting economic policies and geopolitical uncertainty are making the future harder to predict. Supply chains are also undergoing major shifts, with Apple (AAPL) announcing plans to move the much of iPhone production to India by 2026.
These changes will likely continue to surface in upcoming earnings calls from other household names.
Markets remain difficult to parse
The broader market remains trendless, leaving technical analysts and fundamentals investors uncertain. Volatility is still elevated, which is having a real affect on trading behavior.
While the S&P 500’s weekly expected move used to hover around 50 points, it has now grown to more than 60 points, with more than 170 points expected next week. These wider ranges are affecting individual stocks as well—Apple’s daily expected move has doubled in just a few months.
For long-term investors practicing dollar-cost averaging, this means being more patient and perhaps adjusting entry points. A 1% dip might not be as meaningful in today’s environment; waiting for 1.5% to 2% could be more appropriate. Volatility also means portfolio values may swing more dramatically day-to-day, especially if your holdings closely follow the overall market.
A good time for options
Options traders, on the other hand, often thrive in these conditions. With volatility high, options premiums are “rich,” enabling sellers to collect more income, especially for puts offering downside protection. Still, it’s vital to manage risk. Keep positions small and know your exit plan before entering a trade. Even seasoned traders can be derailed by emotional reactions.
Looking ahead, all eyes are on volatility measures and next week’s key economic reports, including the reports on personal consumption expenditures (PCE) and jobs data. With major companies like Apple and Meta (META) set to report, market movement could stay sharp.
Amid the uncertainty, staying disciplined with your strategy remains essential.
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JJ Kinahan is CEO of tastytrade from IG—which includes tastylive, tastyfx and tastycrypto. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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