Stock markets gave up earlier gains after no US-Iran talks took place and traders focused on a busy week of events. With few headlines on Monday, trading was subdued as oil prices strengthened.
Attention turned to the week ahead, which is expected to bring heavy news flow after a quiet start. This shift in focus reduced appetite for risk and limited any rally.
Alphabet Leads The Market
Alphabet moved to a new record high ahead of its earnings. It has outperformed other members of the “Magnificent 7”, including Nvidia, as its Gemini AI model draws attention alongside its advertising business.
With geopolitical uncertainty flaring up again, the market is showing familiar signs of hesitation. The VIX volatility index has recently jumped back above 20, reflecting nervousness over renewed tensions in the Strait of Hormuz and a lack of diplomatic progress. Derivative traders should consider hedging long portfolios by buying puts on broad market indices like the SPY to protect against sudden downside risk.
This week’s quiet start feels like the calm before the storm, with the Federal Reserve’s May decision and April’s inflation report on the horizon. We are seeing choppy price action as traders are unwilling to take on big positions ahead of these major economic data points. This environment could be ideal for strategies like long straddles on the QQQ, which would profit from a significant price swing in either direction following the news.
We saw a similar dynamic back in 2025, when specific stocks with strong narratives decoupled from the nervous market. Just as Alphabet surged then on the strength of its Gemini AI, it has continued to outperform, beating the Nasdaq 100 by over 12% year-to-date in 2026. For those looking for bullish exposure, buying call options on these clear individual winners may be more effective than betting on the entire market rallying.
