Option Trader Expects S&P 500 Index to Hover Around 7000 by Year End

October 31st. The U.S. stock market once again demonstrated a strong performance this year. However, from the perspective of the derivative market, the momentum may be restricted. Options wagers on the S&P 500 index at the end of December are concentrated around 7000 points. If this round number is achieved, it would signify a 19% increase in the index by 2025. Nevertheless, this is only a 2.5% distance from Thursday's closing at 6,822.34 points, with two months remaining in the year. Although Wall Street generally maintains an optimistic outlook on the U.S. stock market, cautious factors still exist. Federal Reserve Chairman Powell indicated that a third rate cut is by no means certain. Earnings reports from tech giants have raised concerns about the outlook for AI spending. Signs of an economic slowdown are emerging, and cracks are beginning to appear in the higher-risk segments of the credit market, casting doubt on the well-being of U.S. consumers. In addition, the majority of the S&P 500 index's gains have been contributed by a few selected stocks, a worrying phenomenon that could exert pressure on the market once these heavyweight stocks weaken. Some strategists started to lower their optimistic expectations after Powell's speech on Wednesday. Even though the last two months of the year usually show strong seasonal performance, a more common explanation is that investors tend to concentrate their positions around round numbers. Gateway Investment Advisors investment strategist Ferrara stated: "The 7,000 point strike price is a very popular psychological level." (Jinse)