Small Caps Hold Up as Traders Brace for Amazon and Intel Earnings

Remy Blaire: With midday trade underway in Chicago, FINTECH.TV correspondent Mark Payton joins us live from the trading floor. Good afternoon to you, Mark, and thank you so much for joining us. There is so much to digest on this Thursday morning. So what activity are you following in midday trade?

Mark Payton: Hey, Remy. One interesting trend that we’re watching here at Cboe is the difference between big technology stocks and smaller companies. While the Nasdaq is under pressure, the Russell 2000 is moving higher, gaining around seven-tenths of a percent. That tells us the selling in technology isn’t necessarily spreading across the entire market. And we’re also watching the VIX. Despite the weakness in technology, the VIX has actually been easing, suggesting investors aren’t seeing this as a broader market sell-off. So we’re seeing some significant moves in individual stocks, but a much calmer picture across the overall market.

Remy Blaire: And of course, the earnings season is not slowing down, Mark. After the closing bell today, we will be getting reports out from Amazon and Intel. So looking at prediction markets, what are market traders expecting?

Mark Payton: Yeah, we’re seeing two very different expectations heading into tonight’s earnings, and what’s interesting is how much Amazon’s odds have been moving. Earlier today, market traders were pricing in roughly a 66% chance that Amazon would beat its earnings target of $2 per share. That dropped to around 39% just recently. Now, for Intel, traders are more confident, putting the chances of earnings topping $0.40 per share at around 85%, and that’s actually climbing a little bit.

Now, back to Amazon. Investors are watching its AWS cloud business and how much the company continues spending on artificial intelligence. For Intel, the focus is on chip demand and whether its turnaround is gaining momentum. But remember, these probabilities are tied to specific earnings targets, not to whether the stocks will move higher. And as we’ve seen this week, even strong earnings aren’t always enough. Investors want to see growth, profitability, and a return on that spending. And tonight’s reports could give us another indication of where confidence in the technology sector stands, Remy.

Remy Blaire: Yeah, for sure. We only have a few more hours to go until we get those results out from Amazon as well as Intel, so we’ll see the reaction in after-hours and premarket trade. Thank you so much for joining us, Mark.

Mark Payton: Thank you.