Dow Jones futures rose 0.14% to near 49,900 in European trading on Friday. S&P 500 futures gained 0.12% to around 7,250, while Nasdaq 100 futures added 0.04% to about 27,600.
US stock futures moved up after Wall Street ended Thursday at record closes. The S&P 500 and Nasdaq 100 reached new highs and recorded their strongest monthly gains since 2020.
Futures Extend Record Rally
In Thursday’s session, the Dow Jones rose 1.62%, the S&P 500 gained 1.02%, and the Nasdaq 100 increased 0.89%. Moves were linked to company earnings and lower oil prices.
After the bell, Apple reported quarterly results above expectations. Attention then turned to Friday earnings from Chevron, Exxon Mobil, Colgate-Palmolive, Estée Lauder, and CBOE.
Markets also tracked US–Iran tensions. Donald Trump said the US would continue a naval blockade of Iranian ports and raised doubts about the Strait of Hormuz reopening soon.
Trump also criticised efforts in Congress to limit his war powers, including a Senate proposal rejected earlier on Thursday, according to Bloomberg. Iran’s Supreme Leader Mojtaba Khamenei said Iran would not give up nuclear or missile capabilities and would keep control of the strait.
Options Strategy And Risk Hedging
With the S&P 500 pushing record highs near 7,250, the market’s bullish momentum is undeniable. The CBOE Volatility Index (VIX) is currently trading near a low of 14, reflecting complacency driven by strong corporate earnings. This environment suggests that short-term call options on indices like the Nasdaq 100 could continue to perform well.
However, we must address the significant geopolitical risk from US-Iran tensions. The potential closure of the Strait of Hormuz, through which nearly 30% of global seaborne oil passes, presents a major threat to stability. This tail risk is not being fully reflected in current equity prices.
When we look back from 2025 at the market’s reaction to the Ukraine invasion in early 2022, we saw how swiftly such events can spike energy prices and trigger a broad market sell-off. That situation showed that volatility can return almost overnight. A similar dynamic could easily play out in the weeks ahead.
Therefore, we believe it is essential to buy protection against a potential downturn. Purchasing put options on broad market ETFs like SPY is a prudent hedge against the current geopolitical fragility. We are also considering VIX call options as a direct play on an anticipated spike in market fear.
At the same time, the situation creates a clear speculative opportunity in the energy sector. While oil prices have been easing, a prolonged blockade would undoubtedly send crude prices sharply higher. We see significant upside in call options for energy giants like Chevron and Exxon Mobil, which are reporting earnings today.
