Triple Witching to End a Busy Week – US Market Wrap
Stocks in the United States churned in the final minutes of trading on Friday, with expiring derivatives contracts and a major rebalancing. Gold reached an all-time high as traders anticipated the central bank’s next move.
The S&P 500 and Nasdaq 100 both closed down 0.2%, with the broader benchmark just off its 39th record high of 2024. The blue-chip Dow Jones Industrial Average rose 0.1%, setting a closing record. According to Asym 500, a derivatives analytics firm, the quarterly “triple witching” saw approximately $5.1 trillion in derivatives contracts tied to stocks, index options, and futures mature. At the same time, an additional $250 billion in index trades were processed.
The option expiry date coincides with the rebalancing of benchmark indexes. The event is known for causing sudden price movements as contracts expire and traders roll over existing positions or open new ones.
FedEx was among the session’s biggest movers, falling 15% after the economic bellwether missed profit estimates and warned that business would slow.
Traders focused on the opposing views of Fed Governors Christopher Waller and Michelle Bowman. Waller told CNBC that favorable inflation data convinced him to support the Fed’s decision to cut interest rates by a half percentage point this week. Bowman, the lone dissenting voice against the massive rate cut, claimed the move declared victory over inflation too soon.
