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Quiver's Morning Markets Wrap

Quiver Editor

Nvidia (NVDA) led a selloff in chipmakers, causing stocks to waver as Wall Street prepared for a significant options expiry. Known as "triple witching," this quarterly event involves the expiration of derivatives contracts tied to equities, index options, and futures, which is expected to trigger substantial market movements. Approximately $5.5 trillion worth of contracts are set to expire, according to SpotGamma, amplifying the potential for sudden price swings.

The S&P 500 (SPY) fluctuated amid trading volume that was 90% above the past month’s average. Nvidia extended its two-day stock rout, wiping out over $200 billion in value, driven by the AI boom. The value of Nvidia-related contracts set to expire is the second-largest of any underlying asset, following the benchmark gauge. The expiration coincides with index rebalancing, where S&P Dow Jones Indices and ETFs that track its gauges adjust company weightings.

Market Overview:
  • Nvidia leads a selloff in chipmakers, losing over $200 billion in value.
  • Wall Street faces “triple witching” with $5.5 trillion in contracts expiring.
  • S&P 500 trading volume surged 90% above the past month’s average.
Key Points:
  • Treasuries lost traction amid strong US services activity data.
  • Existing home sales fell for the third consecutive month.
  • Short interest in major equity ETFs like SPY and QQQ hit record lows.
Looking Ahead:
  • Bears retreat, leaving equities exposed to sudden sentiment shifts.
  • Record inflows into tech funds driven by ongoing AI frenzy.
  • Upcoming corporate highlights include Airbus, American Airlines (AAL), and Sarepta. (SRPT)

Treasuries weakened after data showed US services activity rose to its fastest pace in over two years, improving due to cooler price pressures and prospects for lower borrowing costs. Existing home sales fell for the third straight month. Bearish investors are increasingly absent, leaving equities exposed to potential sudden shifts in sentiment. Short interest in major ETFs like SPY and QQQ (QQQ) hit record lows, supporting stocks and suppressing volatility.

Corporate highlights include Airbus nearing an agreement with Spirit AeroSystems (SPR), American Airlines suspending new pilot training, Sarepta Therapeutics’ gene therapy receiving expanded US approval, Carlsberg weighing options after Britvic rejected takeover bids, and Canada considering tariffs on Chinese-made EVs.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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