Today had an interesting movement in the S&P500 (SPX, SPY) where the market essentially went completely vertical. It appeared to be caused by options hedging, as the 3000 strike was very active especially in tomorrows expiration. The theory is that someone is buying calls (could be closing a short, or just getting long the 3000 calls) which makes dealers SHORT calls. To hedge this position the dealers must buy futures. Besides the large volume at 3000 it was fairly clear that the buyer here seemed indifferent to market impact and was happy to wildly bid up the market. An asset manager or trader probably wouldn’t trade in such a fashion.
By 2:15 EST it appeared the options activity at 3000 tailed off some, and the market traded sideways.
This is speculation and no one can know for sure – except maybe the market makers.