Wall Street Braces for More Wild Days in Stocks After Tech Rout

(Bloomberg) -- The stock market got a long-awaited jolt of volatility late last week after disappointing earnings from technology giants added to angst around the AI-driven rally.

Now traders are bracing for further shocks this week from the US midterm elections and Nvidia Corp. earnings later in November.

The Cboe Volatility Index on Friday touched the highest intraday level since April as the S&P 500 dropped the most since June. The premium for puts protecting against further losses also surged, as did correlations among stocks, which can signal broader stress in the market. Still, those measures remain well below the levels in March after the US and Israel attacked Iran.

With Nvidia due to report earnings, following disappointing results from Amazon.com Inc., Alphabet Inc. and Intel Corp., investors are preparing for more episodes of volatility. Traders are also eyeing US midterm election results for the potential effect on the war in Iran and domestic economic policy.

"This looks more like a bullish rotation with a derating at its core than the beginning of a broad market deterioration.," said Florian Ielpo, head of macro research at Lombard Odier Investment Management.

So far, the latest selloff has been largely focused on the technology sector, with investors rotating away from the high-flying firms that led the gains this year. Realized 60-day volatility on the US benchmark last week touched the lowest in more than a year, with the low correlation this year and tendency of zero-day options traders to buy dips and sell rallies helping to restrain moves.

The late-week slide comes in a year that's been relatively placid. While 2025 saw a cluster of extreme market swings around the tariff tumult in April, in 2026 US stocks have largely shrugged off spikes in oil prices and interest rates.

But even as the technology-heavy Nasdaq 100 capped its worst month since 2025, some investors were betting on a recovery. There were pockets of call and call spread buying seen Friday on the benchmark indexes and some of the most beaten-down tech names such as Intel.

Options were relatively pricey before the larger gyrations late in the week, with the VIX at the higher end of the range over the past five years compared with 20-day realized swings.