"The shift was subtle, then sudden. For weeks, the riskiest trades in finance - crypto, AI stocks, meme names, high-octane momentum bets - had been slipping. On Thursday, that slow-motion retreat snapped. The Nasdaq 100 sank nearly 5% from its intraday peak, its sharpest reversal since April. Nvidia Corp. at one point shed nearly $400 billion despite beating earnings expectations. Bitcoin hit a seven-month low. Momentum names dropped in near-perfect sync."
"There was no obvious trigger. No policy shift. No data surprise. No earnings miss. Just a sudden wave of selling, and an equally abrupt recovery. What rattled investors wasn't just the scale of the moves, but their speed, and what that speed suggested: a momentum-driven market, prone to synchronized swings and fragile under strain. "There are real cracks," said Nathan Thooft, chief investment officer at Manulife Investment Management, which oversees $160 billion."
Risky, high-momentum trades across crypto, AI stocks, meme names and retail-favored momentum bets had been retreating for weeks before a sudden snap that took the Nasdaq 100 nearly 5% from its intraday peak and knocked Nvidia and Bitcoin sharply lower. The episode unfolded without policy, data or earnings catalysts, and featured rapid selling followed by an abrupt rebound. Portfolio managers cut equity exposure as volatility rose, noting valuations leave markets vulnerable to headline shocks. The movements highlight how crowded, momentum-driven positions can synchronize and cascade, increasing market fragility despite pockets of optimism.
Read at Fortune
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