Tech Stocks Remain Resilient Amid Rising Rates and AI Concerns, Options Market Shows Mixed Signals
Despite rising interest rates and concerns about the sustainability of artificial intelligence-driven growth, tech stocks have shown resilience. The options market suggests traders are increasingly hedging against potential pullbacks in big-tech names like those tracked by the Nasdaq-100 Index (QQQ). Open put contracts relative to calls reached a high since June 2023 following reports about ChatGPT owner OpenAI's revenue shortfall, indicating growing bearish sentiment. However, this trend is not mirrored across all indices; for example, similar metrics in SPY and the S&P 500 remain near average. The options activity has been mixed: while put buying increased on Thursday, some of the largest trades were bullish. For instance, a $15 million sale of puts and an over-$8 million purchase of calls occurred during regular trading hours for QQQ in March expiries. In extended hours, bearish bets surged with a high-premium trade involving 680-strike puts and 760-strike calls totaling $20 million. Market experts note that while short-term selloffs may be cushioned by hedging activity, more sustained declines would require significant selling pressure. The mixed signals from the options market reflect uncertainty among traders about whether tech stocks can maintain their upward trajectory in a challenging economic environment.
Topics: AI market concerns Nasdaq-100 put/call ratio QQQ options activity tech stocks