Stocks have spent two weeks looking for a reason to move, and this week hands them four. Nvidia reports after the bell tonight. The July PCE print landed this morning, and Kevin Warsh gives his first Jackson Hole speech as Fed chair on Friday.
Volatility is priced like none of that is on the schedule. My guess is the market is still digesting how big AI can get for growth, and Nvidia is the only one who can answer that. I think we get a sigh of relief tonight and print the lowest VIX of the year this week.
Four Months of SPY, and Two Weeks of Nothing
4 Month SPY Chart
The SPDR S&P 500 ETF Trust (SPY) closed at a record 777.88 on Aug 13 and has gone sideways ever since, finishing Tuesday at 765.91. Twelve points over nine sessions barely registers as a direction.
What's hard to see on that chart is what the waiting costs. Waiting for the Fed, Jackson Hole, NVIDIA Corporation (NVDA) earnings, the Anthropic IPO. There's always something.
Three Month SPY IV vs HV: Traders Keep Paying for a Move
3 Month SPY IV HV
Historical Volatility (HV) shows how much the market has actually moved. Implied Volatility (IV) shows how much traders are paying up front for it to move. Lately the first number is small and the second one isn't, which means people keep buying options in a tape that won't go anywhere.
They assume it will. VIX sat around 15.5 into Wednesday's open, a shade above the low for 2026, so the assumption isn't costing much to hold.
Meanwhile, the Treasury is doing its part on the long end. CNBC reported Monday that the department could tap its $1 trillion General Account to fund bond buybacks, and the 10-year fell seven basis points Tuesday to 4.625 percent before this morning's PCE pushed it back toward 4.67.
Oil is doing the other half of the work. Iran and Oman are discussing a temporary shipping channel through Hormuz, and Trump posted Tuesday that the Navy cleared the mines from the strait. WTI has fallen three straight days to around $81 after touching a 79 handle.
The barrels haven't actually shown up. Kpler counted five vessels through Hormuz on Tuesday. Traders are trading the headline now and will worry about the cargo later, which is the same bet they're making into tonight.
That's the whole setup: cheap volatility, softer oil, a quiet long end, and one earnings report that has to carry all of it. The tape needs to hear that the sky is the limit for NVDA and AI. Then we get some momentum.
Momentum is a fickle thing, and Tim Colby is going live with it this week. Tap here to check him out.
Hopefully this was helpful,
Andrew