Kevin Muir Signals Caution as Vol-Control Funds Approach Buying Limit The stock market’s sharp rally this year has lifted investor sentiment—but it’s also raising red flags for some market veterans. Among them is Kevin Muir, former institutional trader and author of The Macro Tourist blog, who believes the powerful forces driving this surge may be losing steam. In a recent interview with MarketWatch, Muir warned that volatility control funds—also known as “vol-control” strategies—are nearing the end of their buying spree. These large institutional players, which include pensions and endowments, adjust their equity exposure based on market volatility. When markets are calm, they buy. When turbulence rises, they cut back. “This is the kind of behind-the-scenes force that gets little media attention, but moves serious money,” Muir said. He estimates these strategies manage between $300 billion and $500 billion, enough to influence major market swings. According to Muir, much of the stock market’s recent upside—especially over the past two months—can be attributed to these funds methodically re-entering equities after being forced to de-risk during volatility spikes earlier in the year. “I’ve been watching and waiting for the bulk of this buying to play out,” Muir said. “And while some is still ongoing, we’re getting close to the end of it.” He believes this explains why markets have seemed to drift higher on quiet days with no clear headlines. “It’s these vol-control funds steadily buying, even when it doesn’t seem like there’s a reason.” What concerns Muir even more is the relentless optimism from retail traders. “Retail has stayed in and kept buying. And while they’ve done well recently, it feels a lot like 1999—or even the euphoria we saw in 2021,” he said. To Muir, this rally now looks dangerously stretched. He sees U.S. stocks as overvalued, overowned, and heavily concentrated, all in a market environment he describes as unusually unstable due to unpredictable policy shifts and economic crosscurrents. “With seasonals still strong and vol-control flows in play, I didn’t want to fight the rally,” Muir admitted. “But now, it feels like the time has come to step back.” His advice for investors? Begin to reduce risk in U.S. equities and diversify globally. He also cautioned that geopolitical risks—such as tariffs—could become new headwinds for markets already priced for perfection. “The setup reminds me of moments in history when sentiment peaked and concentration was extreme,” Muir said. “I’m not calling a crash, but I am saying: this is the point to start being careful.”

Nvidia Eyes Return to China Market After $8 Billion Setback Nvidia is preparing to re-enter the Chinese market with its H20 chip, a move that could recover billions in lost revenue after facing strict U.S. export restrictions. In a blog post released late Monday, Nvidia said it is seeking approval to resume sales of its H20 chip—a lower-spec version of its Hopper series tailored to comply with U.S. trade rules. The company disclosed it has received assurances from the U.S. government that licenses for the chip “will be granted,” opening the door for a return to the market. This development comes just three months after Nvidia warned that tighter U.S. regulations would significantly impact its business in China. In April, the company took a $4.5 billion charge in its fiscal first quarter, largely due to excess inventory and canceled orders related to the H20 chip. It estimated $2.5 billion in lost revenue for that quarter alone and forecast an additional $8 billion shortfall in the current quarter. The turnaround follows a series of high-level meetings between U.S. and Chinese officials earlier this month. While the U.S. Commerce Department has not commented, Nvidia is optimistic it can resume shipments soon. The potential return to China comes as Nvidia bets big on artificial intelligence. CEO Jensen Huang said in a May interview that the global AI market could grow to $50 billion within a few years—a market China plays a critical role in. If H20 sales resume, it could mark a major win for Nvidia’s efforts to navigate geopolitical headwinds without missing out on the AI boom.