A sharp uptick in equity volatility at the start of August is testing Wall Street’s summer rally. The CBOE Volatility Index has jumped about 42% so far this week, while the S&P 500 has retreated roughly 3.2% from last week’s record, trading near 6,237 on Monday. Options analysts note the benchmark is sitting below so-called gamma-flip levels, a shift that can magnify price swings in either direction. The turbulence follows a July in which retail investors grew more cautious even as major equity indices climbed, according to Axios. Corporate executives moved in the opposite direction of the broader market as well, with insider purchases logged at only 151 S&P 500 companies last month—the lowest count since at least 2018, Washington Service data show. Quantitative hedge funds that thrive on stable relationships between stocks are feeling the strain. Many such funds were hit with losses in July on short positions that moved abruptly against them, Bloomberg Opinion columnist and former AQR risk manager Aaron Brown observed, adding that the volatility set off by U.S.–China tariff uncertainty and pockets of retail trading activity has complicated systematic strategies.