Stock bears obliterated as Nasdaq 100 logs top 10 bullish stat of past decade

• One-standard-deviation out-of-the-money Nasdaq 100 call options saw a 42% price increase, the biggest single-day volatility shift in five years and ninth largest in a decade
• S&P 500 earnings are on pace for 47% growth in Q2, the strongest since the 2021 COVID rebound, while the forward P/E ratio of 19.6 sits below the five-year average
• Nasdaq 100 options volumes are running 18% above July's pace this month, with the rally broadening beyond tech to include 2% gains in materials and industrial stocks

Market Summary: Nasdaq 100 Records Historic Bullish Trading Day

Key Market Movements:

The Nasdaq 100 surged 3.3% on Tuesday to 29,733, marking one of the ten most bullish trading days in the past decade. The S&P 500 extended its four-day rally to nearly 6%, breaking out of a two-month trading range. The tech-heavy index now sits within 3% of its June 3 record high after recovering from a 10% intraday decline through last Wednesday.

Exceptional Options Activity:

Out-of-the-money Nasdaq 100 call options saw their pricing increase 42% in a single day—the largest shift in five years and ninth biggest in a decade. This extreme volatility in options pricing signals massive short covering and bullish positioning. Nasdaq 100 options volumes are running 18% above July's pace, reflecting heightened investor participation.

Market Catalysts:

Several factors drove the rally: forced selling by hedge fund Situational Awareness in AI stocks stabilized last week; Treasury yields retreated with the 10-year stopping below prior highs; crude oil fell below $80 amid potential Iran deal news; and strong earnings growth challenged bearish narratives.

Fundamental Support:

S&P 500 earnings are projected to grow 47% in Q2—the strongest since the 2021 COVID recovery. The forward 12-month P/E ratio stands at 19.6, below the five-year average, countering bubble concerns.

Broad Market Strength:

Beyond tech, materials and industrial stocks rallied 2%. The equal-weight S&P 500 ETF (RSP) gained 1.4%, bringing its YTD return to 14%, slightly outpacing the market-cap weighted S&P 500's 13% advance, indicating healthy market breadth.