Amy Wu Silverman of RBC Capital Markets expects the financial markets to experience a "volatility vacuum" during August 2026 [1].
This projection suggests a period of relative stability and minimal price swings, which can influence how institutional investors hedge their portfolios and manage risk during the summer lull.
Silverman, the head of derivatives strategy at RBC Capital Markets, discussed the outlook during an interview on CNBC's "Squawk Box" on July 7, 2026 [1], [2]. She said the current state of the options market indicates a lack of urgency among traders to protect their positions against sudden downturns.
"The options market is showing very little demand for protection, which points to a calm market ahead," Silverman said [1].
According to Silverman, the timing of this expected calm coincides with the conclusion of the second-quarter earnings season [3]. She said that after the Q2 2026 reporting cycle ends, there is typically a natural pause in significant market movements [3].
This combination of low hedging activity and the post-earnings lull creates the conditions for the predicted vacuum. The absence of major catalysts often leads to lower trading volumes and reduced volatility in equity prices.
"We expect a volatility vacuum in August," Silverman said [1].
She noted that the transition from the high-activity earnings period to the late-summer cycle often results in a temporary stagnation of momentum. "After the second‑quarter earnings season, there’s a natural pause in market moves," Silverman said [1].
“"We expect a volatility vacuum in August."”
A 'volatility vacuum' typically describes a market environment where a lack of news or catalysts leads to stagnant price action. For investors, this often means lower risk in the short term, but it can also signal a period of complacency. When demand for protective options is low, it suggests that market participants are not pricing in significant downside risks, potentially leaving the market vulnerable to unexpected shocks that could trigger a sharp reaction due to the lack of existing hedges.
