Analysis: Rising hedging demand suggests that future stock market volatility will intensify

Deep Tide TechFlow news: On July 20, overseas media analysis pointed out that the stock market’s upward momentum is weakening, while optimistic earnings expectations are being closely watched—two signs suggesting that this summer may be full of volatility. As investors face an increasing number of concerns, overall bullish sentiment is being challenged, and market volatility is quietly rising. The closing of AI-related positions is triggering strong market rotation. Demand for hedging is rising rapidly. The Nations SkewDex Index (measuring tail risk that the S&P 500 may face) has surged to its highest level since April, which could further push up other volatility indicators.

Although the panic index remains below 20 and is far from a concerning level, sharp volatility in individual stocks is blurring the overall trend. The price swings of key AI-related stocks driving momentum trades are intensifying, but unlike the first half of this year, the narrative of “stocks rising and volatility rising” no longer seems to hold. Instead, stocks are plunging sharply while volatility continues to climb. (Jin10)