Strong growth of US tech companies prompts investors to hedge risks

According to Bloomberg, major technology companies have driven a rapid recovery in the US stock market following a recent downturn. The decline was triggered by a sweeping April 2 tariff order from US President Donald Trump. However, traders now believe these stocks are particularly vulnerable amid escalating geopolitical tensions, the agency added.

Growing skepticism toward the rally of megacap indicates investors’ awareness of potential risks. Rocky Fishman, founder of research firm Asym 500, noted that the economic impact of tariffs remains a concern.

Earlier, boosted by a strong earnings season, the Bloomberg Magnificent Seven Index surged 31% since April 8 of this year. Over the same period, the S&P 500 Index climbed 20%.

Bloomberg also reported that on Friday, the relative cost of hedging against a 10% drop in the ETF reached its highest level since early April. Commenting on these shifts, Fishman linked them to changing investor sentiment regarding the sustainability of the current market rally.