2-Yr Benchmark Govt Yields - U.S. vs Other Nations

This year, the low correlation in the U.S. stock market has been mainly driven by leading AI companies, but capital is shifting from semiconductor sectors towards lagging areas such as SaaS, narrowing the dispersion and weakening the foundation for low correlation. Bloomberg strategists warn that under abnormal Gamma volatility, a turn to negative could cause options dealers to reverse their hedging direction, amplifying market fluctuations. While the current index is less than 1% below its high, a 3% to 4% pullback could trigger a sharp Gamma reversal, putting the seemingly calm market at risk of dramatic volatility.