Despite the Magnificent Seven making record highs, the AI trade is showing signs of cracks. Concerns over OpenAI's revenue growth have hit neocloud stocks, and chips are selling off Tuesday on concerns about Chinese competition. Add the Fed's first rate hike since 2023 in September, with another expected right behind it, and the tech-heavy index has plenty working against it. Those pressures are real, but options traders have been bracing for bigger swings than the Nasdaq has delivered in recent weeks. QQQ's implied volatility index (IVx), a measure of how much movement options traders are pricing in, closed Monday near 20.7%. That puts Nasdaq-100 volatility on par with small caps.
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