One factor that may be partly behind the S&P 500's curious action this week
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- S&P 500 ended almost exactly where it closed Wednesday despite multiple catalysts, including Micron gaining double-digits post-earnings, U.S. GDP printing ahead of expectations at 2.1%, and PCE inflation hitting 4.15% — its highest level since April 2023.
- Nasdaq 100 futures dropped 3% from their early overnight peak after traders faded the Micron-driven rally, then reversed as dip-buyers stepped in, with the tech-heavy index closing up roughly three-quarters of a percent.
- Brent Kochuba, founder of options analytics service SpotGamma, said dealers are 'long gamma in both index and in top stocks, so that is stabilizing' — a positioning in which market-makers profit by buying dips and selling rallies, pinning the index in a range.
- Market-maker gamma is creating a mechanical ceiling and floor, with Kochuba's analysis showing institutional buyers stepping in when the S&P 500 slips below 7,200 and selling when it rises above 7,400.
- Apple was notably down big on Thursday even as Micron surged, highlighting how stock-specific moves inside the index were getting smoothed out by broader options dynamics.
- Treasury bonds barely reacted to the hot macro data, with the long-term Treasury ETF TLT moving just 3 basis points by the close despite the GDP and inflation surprises.
- June 30 monthly options expiry falls on Tuesday, and Kochuba noted dealers may be more comfortable owning cheaper out-of-the-money bets as expiration nears — though he flagged that an 'AI repricing, a DeepSeek moment, or if rates are seen going higher' would break the range.
Why it matters: If the 'long gamma' range holds, the S&P 500 is mechanically pinned between roughly 7,200 and 7,400 until the June 30 options expiry, neutralizing macro catalysts like the 2.1% GDP beat and 4.15% PCE print. Kochuba identified three potential range-breakers: an AI repricing event, a DeepSeek-style shock, or a hawkish shift in rate expectations.
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