Here's Why Here's Why the Stock Rally is Starting to Crack
Oct 3, 2025
Kristine Aquino, Markets Live Managing Editor at Bloomberg, dives into the intriguing dynamics of the recent stock market rally. She highlights record highs and strong economic data while revealing a shift in investor sentiment. Caution is emerging as investors hedge against volatility, pointing to options positioning as a sign of unease. Kristine discusses past rally endings and potential triggers for a downturn, including a weakening labor market and a prolonged government shutdown. Insightful perspectives that capture the current market's pulse!
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Market Rally Is Broad And Historic
- The S&P 500 has had a blockbuster year with 29 closing record highs and is up 14% year-to-date.
- Historically the fourth quarter tends to be positive, and most signs point to another finish in the green.
Rally Has Broadened Beyond Mega Tech
- Big tech, especially the "magnificent seven," drove much of this year's gains but the rally broadened since April.
- All major S&P sectors are in the green, showing improving market breadth beyond just tech.
Hedging Rises Even As Stocks Hold Up
- Investors aren't selling the S&P 500 but they are increasingly hedging via options and volatility protection.
- The VIX sits near yearly lows, yet some large option trades signal pockets of caution among market participants.