Early gains in US stock markets were driven by expectations of a delay in tariffs, particularly the potential suspension of an additional 50% tariff on China. However, it appears these tariffs will proceed as planned.
The Nasdaq experienced a 7% intraday decline, reversing a previous 4% gain and settling at a 2.2% loss. Notably, the index remains above yesterday’s low due to a substantial rebound.
Nvidia Volatility
Nvidia’s trading has been particularly volatile, fluctuating between $86.62 and $105.85, and its value has decreased as the day progresses.
Earlier momentum in US equities, which had propelled markets upward, was rooted in traders’ hopes that Washington might hold off on implementing new tariffs, especially the ones targeting goods from China. However, that optimism has faded, with confirmation suggesting that the extra 50% levy will move ahead, effectively ending speculation of any postponement.
Price action then reversed. The Nasdaq, after climbing roughly 4%, gave back those gains and more, falling 7% during intraday trading. It settled lower by just over 2%, although interestingly, it stayed above yesterday’s trough. That bounce—while sharp—suggests there was a degree of bargain-hunting once prices dropped, but it has not been enough to fuel a full reversal.
Huang’s company, widely followed for its influence on sentiment around artificial intelligence and large-cap growth stocks, saw its shares swing within a large range: from $86.62 at the bottom to $105.85 at the day’s peak. That level of volatility is not uncommon in the name, but the trajectory throughout the day was negative, closing notably weaker than the session’s highs. While volume was substantial, price direction suggests sellers had more control after the first hour.
Market Uncertainty
For those of us focused on short-term contracts and leveraged exposures, the rapid shifts in price and sentiment tend to compress time horizons. When liquidity dries up or sentiment changes pace—as it clearly did today—it places extra stress on those relying on near-the-money gamma or open spreads structured for directional strength. Skews across weekly contracts widened briefly before fading, hinting at concentrated unwinds rather than long-term reassessments.
The way the Nasdaq recovered off lows—only to lose footing late in the session—should not be ignored. It speaks to a market still uncertain about the direction of headline-driven flows. Index-level options saw strikes well below and well above current levels drawing active two-way flow. This suggests there is very little consensus expectation.
Put-call volume spiked in some of the larger component names, though not uniformly. This fragmentation—where some contracts saw heavy repositioning, while others remained thin—can offer short-term windows for building low-gamma exposure, provided conditions don’t shift too rapidly. But there is also a broader message in this behaviour: participants are hesitant to hold naked direction over multiple sessions.
In our view, tight management becomes necessary when reactions to macro headlines arrive with such force. It’s no longer about predicting the next move, but about having prices in place to act when velocity hits. For those of us using intraday delta-neutral positions, today served as a good reminder of how fast positions can move out of balance. Rebalancing frequency needs to adjust accordingly during these moments.
While the broader index held key levels, specific names—particularly in high-beta tech—showed deteriorating bids late in the session. That breakdown came with lower liquidity depth and widening spreads in shorter-dated options. This reinforces the need to watch order-book behaviour rather than just implied volatility metrics. We’ve seen before that these minor tells can flag major shifts before the tape catches up.
There are names trading with three to five times their average gamma exposure relative to float. We’re watching those particularly closely. It typically doesn’t take much volume to force movement when positioning becomes that tight. In moments like this, opportunity tilts more toward maintaining flexibility than holding a firm directional stance.
