US equity gauges appear steady as the S&P 500 ends the quarter flat and the Nasdaq 100 shrugs off bond yields and AI trade risks. The Cboe Volatility Index remains well below 20, masking a violent rotation balancing rising and falling sectors. However, data from Macro Risk Advisors reveals this calm is deceptive, showing the widest single-stock divergence since the 2000 dot-com crash.

Dean Curnutt, chief executive of Macro Risk Advisors, warns the broader market sits on fragile footing, vulnerable to a macro shock. He advises using VIX calls and call spreads for protection against potential drawdowns, citing risks from AI hyperscalers and chipmakers amid rising data-center debt concerns. As October begins, Wall Street grapples with AI durability and higher interest rates amid sticky inflation.

A one-month S&P 500 put-to-call skew sits in the bottom-fifth percentile, indicating low hedging activity and setting up a sharper pullback potential on negative headlines. With JPMorgan Chase & Co. kicking off earnings Oct. 13, single-stock volatility is poised to rise relative to index volatility. Bulls find solace in resilient economic growth and projected third consecutive quarterly profit expansion above 20% for S&P 500 companies.

Key upcoming events include the jobs print, consumer price index report, and an interest-rate decision, leaving stocks vulnerable to surprises amid low expected fireworks in the near term.