Traders have been placing more bearish bets on equity derivatives in recent days, data showed on Wednesday, indicating less confidence in U.S. stocks rebounding from a sharp sell-off which has particularly hit high-flying tech names.
Investors’ tendency to look past minor wobbles in stocks as the S&P 500 rallied about 90% over the past year or so has been a key feature of the equity market since it rebounded from March 2020 pandemic lows and has helped make market pullbacks shallow and brief. That, however, may be changing.
On Wednesday, Wall Street’s major indexes extended their decline from earlier this week after stronger-than-expected inflation data stoked worries of tighter monetary policy to combat what many investors fear could be a prolonged period of inflation. The S&P 500 Index was down 1.7%, while the Nasdaq Composite was 2.3% lower.