Citi(US:C) Hua Er Jie Jian Wen·2025-10-13 12:40Core Viewpoint - Investors are preparing for significant stock market volatility during the earnings season, with expectations of an average price fluctuation of 4.7% for S&P 500 component stocks, reflecting heightened concerns over various macroeconomic challenges and the performance of AI and tech stocks [1][2]. Group 1: Market Volatility Expectations - The average expected volatility of 4.7% for S&P 500 component stocks is comparable to the highest levels seen since 2022, indicating a strong anticipation of price movements following earnings reports [2]. - The increase in option prices suggests that investors are bracing for significant fluctuations in individual stocks, particularly in light of concerns regarding government shutdowns and trade policies affecting corporate earnings [1][2]. Group 2: Focus on AI and Tech Stocks - AI and technology stocks are at the center of market volatility, with rising skepticism regarding their valuations and future earnings prospects [6]. - Non-essential consumer goods, technology, and healthcare sectors are expected to experience the most significant volatility this earnings season, with implied volatility for non-essential consumer goods reaching its highest level since 2020 [6]. Group 3: Market Dynamics and Repricing - The volatility observed in large stocks like Oracle and AMD has led to a repricing of options for other stocks, indicating a broader market impact [7]. - The low correlation among stocks has resulted in individual stocks experiencing greater volatility than the S&P 500 index, contributing to a more stable index performance overall [5].