Khouw highlights that the State Street Materials Select Sector SPDR ETF (XLB) has been one of the week's best-performing sectors, up nearly 17% year-to-date and outperforming the S&P 500. He attributes this partly to AI infrastructure buildout and precious metals supported by monetary policies. The one-month at-the-money implied volatility for XLB options is currently just over 14%, significantly below its five-year average of 19.5% and closer to its five-year low of 11.8%, making options a potentially attractive low-risk entry point.