S&P call options surge to a record $2.6 trillion! Goldman Sachs traders warn: the market is entering a "semi-irrational buying mode."

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The fervor surrounding tech stocks and the semiconductor sector is pushing the U.S. stock market into an extreme state.

Goldman Sachs trader Brian Garrett issued a warning, saying the market has entered a “semi-irrational chase mode” ("semi" is a pun, hinting at the semiconductor-driven mania). The nominal value of S&P 500 index call options traded yesterday exceeded $2.6 trillion in a single day, setting a historic record; the semiconductor sector's weekly Relative Strength Index (RSI) hit its highest level since 1999, sparking comparisons to the dot-com bubble era.

Specifically, nearly 60% of S&P 500 index options traded yesterday were call options. Rich Privorotsky, head of Goldman Sachs One-Delta, stated that the U.S. stock market has “fully entered the territory of spot up, volatility up, and chasing gains,” with systematic strategy funds (CTA) basically returning to full long positions.

Meanwhile, QQQ volatility has surged sharply, and its price spread with S&P 500 volatility widened to over 6 points. Thirty-five S&P 500 component stocks saw moves greater than three standard deviations in one day, the most since February 3rd this year. SoftBank soared 18% in one day during Japan’s market holiday catch-up, further fueling the tech sector's chase-up atmosphere.

Semiconductor momentum nears 1999 extreme value, bubble comparisons arouse caution

The upward momentum in the semiconductor sector is especially noteworthy. Goldman Sachs warned that the breakout in the semiconductor sector is “essentially parabolic,” and before supply normalizes, the market may continue to give ever higher valuations to the entire ecosystem, but “obvious risks are accumulating.”

The SOX index’s weekly RSI has risen to its highest since 1999. Market insiders cite historical comparisons to 1999—when telecom equipment suppliers were flooded with orders, providing a “tangible bottleneck narrative” for the period's rally, highly similar to today's logic of AI computing power scarcity.

Bank of America noted that the current S&P 500 rally evokes memories of the late 1920s and the dot-com bubble, but market pricing for tail risk options remains low, diverging significantly from actual volatility.

AI infrastructure narrative continues to expand, signals from demand side are strong

The core narrative driving this round is still the large-scale deployment of AI infrastructure.

The latest collaboration developments between xAI and Anthropic are among the most noteworthy recent progress. There are two interpretations: First, demand for high-end computing power remains exceptionally strong, and companies are continuously optimizing computing utilization and capacity acquisition, with ecosystem interconnectivity deepening. Second, players in the AI infrastructure and inference market are expanding. Beyond hyperscale cloud service providers, more scale-capable new entrants are emerging.

Goldman Sachs said investors continue to increase holdings across AI-related sectors, with steady buying in the U.S. market.

Consumption divergence intensifies, bulk spending and small consumption in stark contrast

Aside from the tech fever, structural divergence on the consumer side is deepening.

Whirlpool (WHR) shares plunged 16% after hours yesterday, with management describing the current environment as “rapidly deteriorating macroeconomic conditions,” and announcing “decisive actions” to restore profitability, including price hikes and faster cost reduction. By contrast, DoorDash reported “a strong start” to Q2, with “continuing strong demand,” pushing its stock up about 10%.

Goldman Sachs traders summarized that in bulk spending and housing-related consumption areas, the market feels like being in a recession; while in food delivery and small consumption areas, it's as if nothing has happened. "Consumers have not disappeared, but have become highly selective—maybe they aren’t renovating, but they’re still ordering delivery."

Risk warning and disclaimerThe market has risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users' specific investment objectives, financial situation or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investing based on this is at your own risk. ```