Fed Signals Support, Triple Witching Volatility, & RIA vs Broker

The Money Wise guys open this week’s episode with a look at last week's market performance, which saw a modest rebound. The Dow climbed 497 points (1.2%), the S&P 500 added 29 points (0.5%), and the NASDAQ rose 30 points (0.2%). Despite the uptick, year-to-date numbers remain in the red: the Dow is down 1.3%, the S&P 500 is down 3.6%, and the NASDAQ is down 7.9%. The discussion focuses on Friday’s "triple witching" volatility, which brought significant buying volume—92% above the daily average—and helped markets finish the week strong. While the rally was welcomed, the guys caution that continued volatility is likely, especially as we enter earnings season and companies may take advantage of lower stock prices to release less-than-stellar news.

A major theme of the episode was the Federal Reserve's latest meeting, which the Money Wise guys note they barely mentioned in the prior week—a sign, they joke, that “Dad would be proud.” The Fed struck a more dovish tone, with Chairman Powell signaling concerns about economic growth and reducing the Fed’s monthly balance sheet runoff from $25 billion to $5 billion. While Powell wasn’t fully convinced that upcoming reciprocal tariffs would fuel long-term inflation, the Fed's updated stance and talk of possible rate cuts (now estimated at two in 2025) helped lift market sentiment midweek. However, volatility persisted, and the team emphasizes that the market's reaction was less about surprises and more about the Fed giving investors what they wanted: signs of a willingness to support the economy without appearing overly reactive.

Triple Witching Volatility

Friday’s triple witching—a quarterly event when stock options, index options, and futures contracts expire simultaneously—brought a surge in buying volume, with activity spiking 92% above the daily average. While some of the movement may have been driven by technical factors and short-term positioning, the team notes that it contributed to a strong close that helped markets notch modest weekly gains. This kind of volatility, they emphasize, is exactly what they’ve been preparing listeners for all year: unpredictable swings driven more by market mechanics and sentiment than fundamentals.

In the second hour, the Money Wise guys explore RIA vs. Broker. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.