Susquehanna’s Chris Murphy Identifies Increased Buying Into Blue Chip Weakness Heading Into 2026

This analysis draws from the CNBC “Power Lunch” interview (2025-12-30) [1] where Susquehanna Financial Group’s Chris Murphy, a respected options market expert, observed an increased investor willingness to buy into weakness for blue chip stocks heading into 2026. The observation aligns with mild market weakness on December 30: the Dow Jones Industrial Average (blue chip-focused) closed down 0.08%, NASDAQ Composite down 0.10%, and S&P 500 essentially flat (+0.03%) [0]. Simultaneously, Fed minutes released the same day indicated most officials expect additional 2026 rate cuts—a macro catalyst that supports blue chip stocks with stable cash flows [2]. This suggests some investors may already be acting on the identified trend, potentially limiting short-term blue chip downside.

1. Credible Options Market Signal
   : As a leading options market maker, Susquehanna’s observations carry weight, indicating a meaningful shift in derivatives positioning toward bullish strategies on blue chips during pullbacks.
2. Contrarian & Macro-Aligned
   : The buying into weakness trend acts as a contrarian indicator of temporary blue chip weakness, reinforced by expected rate cuts that reduce capital costs and enhance dividend attractiveness relative to bonds.
3. Potential Market Structure Impact
   : Sustained buying could increase blue chip resilience during pullbacks, shift capital from speculative assets, and reduce overall market volatility due to blue chips’ stabilizing effect.

• Fed Policy Uncertainty
  : Deviation from the expected 2026 rate cut path could diminish blue chip appeal [2].
• Earnings Volatility
  : Blue chips remain exposed to earnings misses, which could trigger deeper weakness [0].
• Sentiment Reversal
  : If the buying trend fails to materialize, blue chips may face further downside [0].

• Blue Chip Resilience
  : The trend may create a valuation floor for blue chips during market pullbacks [0].
• Macro Support
  : Expected rate cuts in 2026 favor established companies with consistent cash flows [2].

Investors should note Susquehanna’s observation of increased buying into blue chip weakness, supported by mild December 2025 market pullbacks and expected Fed rate cuts. Critical metrics to monitor include options market activity (put/call ratios, open interest), upcoming Fed communications, blue chip earnings reports, and major index performance to validate the trend and assess its long-term impact. No specific investment recommendations are provided.