Volatility Check

The VIX, the options market’s gauge of expected S&P 500 volatility, is at 17.22 in pre-market trading, down 3.48% from Thursday’s close of 17.84. It finished Thursday at the 60th percentile of its own past year, pricing about 81% more movement than the 9.8% the S&P 500 actually delivered over the prior two weeks. Traders are letting a little of that protection go ahead of the inflation report, but they are not unwinding it aggressively.

Commodity volatility is still where the uncertainty is priced. As of Thursday’s close, the gauge of expected movement in gold sat at the 73rd percentile of its past year and oil’s equivalent at the 72nd, after a 21.9% single-session jump. Crude has since pulled back below $100 a barrel in pre-market trading, which says those readings reflect headline risk around the Strait of Hormuz rather than a settled view on supply.

1. Market Recap

Stock futures are pointing higher ahead of Friday’s open, with S&P 500 futures up 42.50 points (+0.56%) to 7,641.00 and Nasdaq-100 futures up 179.75 points (+0.62%) to 29,315.00. The reason is oil backing off: U.S. crude is back below $100 a barrel at $99.60 and Brent is at $104.08, after spiking as high as roughly $108 during Asian trading on renewed fighting around the Strait of Hormuz. Asian stocks still finished sharply lower, with the MSCI Asia Pacific Index down about 1.9%, and the 10-year Treasury yield pushed toward 5% overnight before easing back to 4.94%. None of this is settled: the August Consumer Price Index report lands at 8:30 AM ET and will most likely decide the day.

Stocks fell for a fourth straight session as two pressures overwhelmed everything else: a war-driven spike in oil and a sharp move higher in interest rates. The S&P 500 closed at 7,591.70 (-0.58%), the Dow gave up 316.56 points (-0.60%) to 52,064.10, and the Nasdaq-100 fared worst at 29,103.51 (-1.08%) as the largest technology stocks, which are the most sensitive to rising rates, took the brunt of it. Small-cap stocks fell 1.04%. The VIX rose 8.38% to 17.84 as traders priced in more movement ahead of next week’s Federal Reserve decision.

The main driver was the Strait of Hormuz conflict, now in its 195th day. Iran said it attacked 10 vessels near the Strait overnight, the largest declared wave of shipping attacks since the war began, and additional vessels were reported taking fire in the northern Gulf. U.S. crude settled at $103.89 (+8.14%) and Brent, the global benchmark, at $108.95 (+7.65%), both the highest closes of the conflict so far. Near-term Brent contracts are trading about $8.30 above later-dated ones, which is the market’s way of saying supply is physically tight right now rather than just at risk later. The national average gas price has followed oil to $4.277 a gallon.

The August producer price report added to the pressure. Headline producer prices rose 0.4% for the month and 5.4% from a year ago, the hottest reading of 2026 and slightly above forecasts, driven by a 4.2% jump in energy costs with diesel alone up 24.1% on the month. Stripping out food and energy, the underlying number was actually soft at +0.2% versus a +0.3% forecast, but the market ignored that in favor of the hotter headline. The 10-year Treasury yield rose 11 basis points, or 0.11 percentage points, to 4.94%, its highest since 2023, helped along by a Treasury buyback operation that drew weaker demand than expected.

Two single stocks pulled in opposite directions. Apple rose 3.56% to $326.57 after unveiling the iPhone Duo, its first foldable phone at $1,999 and the first major launch under incoming CEO John Ternus; Citi, Bank of America and Evercore ISI all reacted positively. Oracle went the other way during the session, falling 5.38% to $152.94 on concerns about its debt-funded AI infrastructure spending, then reversed hard after the close, jumping roughly 7% on quarterly revenue of $19.35 billion (+30% from a year ago), adjusted earnings of $1.92 a share, cloud infrastructure revenue more than doubling, and raised full-year guidance. Elsewhere, NVIDIA fell 2.37%, Meta slipped 1.42%, and Tesla eased 1.16%, while Microsoft (+0.16%) and Alphabet (+0.59%) held up better.

Gold fell 1.31% despite the risk-off tone, pressured by a stronger dollar and the shift toward expecting a rate hike. Bitcoin fell 1.81%, trading with stocks rather than as a hedge.

Energy stayed alone at the top of the board for a second session, and it is now the only sector confirmed as a leader on both the weekly and daily views. Utilities dropped out of the Early Rotation list, leaving that group without a single sector in it. Copper Miners joined the group of recent leaders that have started to turn down. The Confirmed Weakness list was unchanged, and it still holds six of the eleven sectors.

Measured against the S&P 500. Confirmed means both the weekly and daily trends agree; Early Rotation means the weekly base is intact and the daily trend is just turning up; Maturing Leadership Rolling Over means a recent leader whose daily trend has just started turning down, but which hasn’t broken down into confirmed weakness.

The three shades show how long a name has been outperforming or underperforming the S&P 500. Early breakout and early breakdown are the newest, showing up in our one-month screen only. Building means one and two months agree. Confirmed means one, two and three months all agree, so the move has been in place for a quarter.

The Institutional Eight: qualifying trades clear a minimum $500K in premium (long calls and puts) or $10 million in Capital at Risk (short puts, meaning the cash you would need to buy the shares if assigned), at least 7 days left before expiration, and are filtered for data quality. Short calls, which have an unclear directional read, are excluded as a category.

No names clear our bar for this window. We look at companies reporting after today’s close and before Monday’s open, and we only feature names whose options are liquid enough to trade a defined-risk spread without giving up an unreasonable amount on the bid-ask spread. Nothing in this window met that standard. No company at all is scheduled to report after today’s close, and Monday’s before-the-open list is made up entirely of small companies whose options markets are too thin to trade a spread in without giving up too much on the bid-ask spread.

Zero qualifying names this session

Earnings season is between waves right now. The next meaningful cluster arrives with the mid-September reporters, and we will feature them here as they come into the window. In the meantime, the volatility worth trading this week is scheduled macro volatility rather than company-specific volatility: see Section 8.

Our D-Edge score combines trend direction and Relative Strength (performance versus the S&P 500) into a single directional read. IV Rank shows where implied volatility sits versus its own past year, 0% is the cheapest options have been, 100% the most expensive; above 50% favors selling premium (credit spreads), below 50% favors buying it. AMC = after the market closes; BMO = before it opens.

Names where two or more of the five methods (Sector Rotation, Relative Strength, Institutional Flow, Earnings and platform trade idea signals) independently point the same direction. Be careful with bounce signals this week. Twelve stocks flashed a trend-following buy or sell signal pointing the opposite way from their own Relative Strength ranking, and eleven of those twelve were buy signals on names that are still underperforming the S&P 500. In a fourth straight down session, that pattern usually means a bounce inside a downtrend rather than a turn. None of them made the lists below.