The three major indices of the New York Stock Exchange closed higher due to the influx of bargain hunting despite the volatile 'quadruple witching.'
On the 21st (U.S. Eastern Time), the Dow Jones Industrial Average closed up 32.03 points (0.08%) at 41,985.35, while the Standard & Poor's (S&P) 500 index recorded a rise of 4.67 points (0.08%) at 5,667.56. The technology-focused Nasdaq index increased by 92.43 points (0.52%) to close at 17,784.05.
Early in the session, the market started lower as European stock index futures were weak and geopolitical tensions in the Middle East dampened investor sentiment. In particular, the Minister of National Defense of Israel made comments suggesting that parts of the Gaza Strip could be permanently occupied, spreading a risk-averse sentiment. Additionally, this day marked a 'quadruple witching,' when stock and index-related futures and options expire at the same time, with Goldman Sachs estimating that approximately $4.7 trillion in options expired, increasing volatility.
However, after the opening, a steady inflow of bargain hunting led to a gradual rebound in the major indices. Notably, the S&P 500 index succeeded in turning upward with a concentrated buying surge in the last 15 minutes before closing. The comments from former U.S. President Donald Trump, hinting at flexibility in his planned tariffs set to take effect in April, also supported investor sentiment.
Nevertheless, the uncertainty regarding tariff policies remains a concern for the market. Experts are wary of the potential economic impact of tariffs leading to inflation and a slowdown in growth.
According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of the federal funds (FF) interest rate remaining unchanged until the end of June decreased to 22.1%, while the likelihood of a 25 basis point rate cut rose to 67.3%. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), a measure of market anxiety, recorded a decrease of 0.52 points (2.63%) to close at 19.28.