Large asset managers are ramping up hedges ahead of the traditionally thin summer trading period, worried that a combination of oil-price swings and unresolved trade disputes could trigger a repeat of last August’s market sell-off. Options desks report heavier demand for equity put protection and volatility strategies even as global equities hover near record highs. The July 9 deadline for a U.S.–EU tariff agreement, continued uncertainty over U.S.–China trade relations and a fragile Israel-Iran cease-fire are viewed as key catalysts. HSBC Asset Management’s global chief investment officer, Xavier Baraton, said the firm is buying puts because markets are unlikely to receive the upbeat signals they expect over the next three months. Goldman Sachs’ asset-management team is advising clients to add volatility, interest-rate and trend-following trades, while LGIM strategist Chris Jeffery cautions that investors may be underestimating tariff risk. UBS notes that derivatives pricing implies a rise in one-day volatility spikes, a pattern that contributed to last August’s rout, and estimates that computer-driven volatility-control funds oversee about $700 billion in assets. Despite the caution, the VIX sits below 18—down from 52 in April—though one-month VIX futures trade about 1.5 points above spot levels. World stocks are up roughly 7% this year, and crude has oscillated between $63 and $81 a barrel in June, pushing the OVX gauge of expected oil volatility to its highest since 2022. Some asset managers warn that a sudden oil shock could strengthen the dollar and unravel the prevailing risk-on consensus.