U.S. stock volatility surged after disappointing results from major technology companies intensified concerns about the AI-driven rally, prompting Wall Street to brace for further turbulence. According to Sina Finance, the S&P 500 posted its steepest decline since June on Friday, while the VIX briefly reached its highest level since April.
Premiums on put options protecting against further losses and correlations between stocks also rose, though both remained well below levels reached in March after U.S. and Israeli strikes on Iran. Traders are watching this week’s U.S. midterm elections, Nvidia’s earnings later in November, and developments in Iran negotiations that could affect U.S. military action after the elections and oil prices.
Recent losses have been concentrated in technology stocks, following disappointing results from Amazon, Alphabet, and Intel. Some investors are positioning for a rebound, including through call-option purchases in benchmark indexes and some of the hardest-hit technology stocks. Florian Ielpo of Lombard Odier Investment Management described the move as a bull-market rotation driven by valuation cuts rather than the start of broad market deterioration.