Options traders expect the S & P 500 to end the year around 7,000

The US stock market has another stellar performance this year, but from the perspective of the derivatives market, the stamina may be limited. Options bets on the S & P 500 index at the end of December were concentrated around 7,000 points. If this round number is reached, it will mean that the index will rise by 19% in 2025. But this is only 2.5% of the space from the 6,822.34 points closed on Thursday, and there are still two months left in the year. While Wall Street as a whole remains optimistic about the outlook for US stocks, reasons for caution remain. Federal Reserve Chairperson Powell said that a third interest rate cut is far from certain. And the earnings report of the tech giant has raised concerns about the outlook for artificial intelligence spending. Signs of an economic slowdown are emerging and cracks are starting to appear in riskier parts of the credit market, raising questions about the health of the American consumer. Moreover, most of the gains in the S & P 500 were contributed by a handful of stocks, a concern that the market could come under pressure if those heavyweights weaken. Some strategists began to downgrade their bullish forecasts after Powell's speech on Wednesday, even though the year-end months are usually seasonally strong. But another, more common explanation is that investors tend to concentrate their positions near the round-number mark. "The strike price of 7,000 is a very welcome psychological level," said Ferrara, an investment strategist at Gateway Investment Advisors. (Jin Ten)