🚨 WALL STREET’S FAVORITE TRADE IS FALLING APART
For years, following the stocks that were rising the most—and betting against the ones that were lagging—was one of the most profitable strategies in the market. In 2026, the so-called momentum trade gained extraordinary traction, driven by AI giants like Nvidia, AMD, and Micron.
But the game has changed.
📉 The S&P 500 Momentum Index jumped 44% in the second quarter, its best quarterly performance ever recorded. Over the past five years, it had gained 133%.
Since July 1, however, the index has fallen more than 9%, while the S&P 500 is up 2.8%. The result puts momentum on track for its worst relative performance in 25 years.
The reversal was even more painful for hedge funds that were leveraged and simultaneously bought winning stocks while shorting the laggards.
One of the biggest shocks came from biotech stocks. Moderna’s surge—about 150% in a month—hit investors hard who held short positions in the sector.
At the same time, speculators increased their short positions in Nasdaq-100 futures to levels close to two-decade highs.
The warning sign is clear: even with the major indexes still near all-time highs, the market is becoming far more treacherous.
And there’s another worrying factor: tech giants continue to ramp up their investments in AI infrastructure and data centers, raising the question of how long this spending cycle can support current valuations.
Wall Street has discovered an old rule again:
🔥 When everyone rushes to the same side, all it takes is a shift in sentiment to turn momentum into a drop.
The question now isn’t just which stocks will keep going up.
It’s: who will be stuck when momentum finally runs out?
$NVDAB $AMDB
#WallStreet #Stocks #Nasdaq #SP500 #AI #Nvidia #AMD #Investing #Markets #Finance
For years, following the stocks that were rising the most—and betting against the ones that were lagging—was one of the most profitable strategies in the market. In 2026, the so-called momentum trade gained extraordinary traction, driven by AI giants like Nvidia, AMD, and Micron.
But the game has changed.
📉 The S&P 500 Momentum Index jumped 44% in the second quarter, its best quarterly performance ever recorded. Over the past five years, it had gained 133%.
Since July 1, however, the index has fallen more than 9%, while the S&P 500 is up 2.8%. The result puts momentum on track for its worst relative performance in 25 years.
The reversal was even more painful for hedge funds that were leveraged and simultaneously bought winning stocks while shorting the laggards.
One of the biggest shocks came from biotech stocks. Moderna’s surge—about 150% in a month—hit investors hard who held short positions in the sector.
At the same time, speculators increased their short positions in Nasdaq-100 futures to levels close to two-decade highs.
The warning sign is clear: even with the major indexes still near all-time highs, the market is becoming far more treacherous.
And there’s another worrying factor: tech giants continue to ramp up their investments in AI infrastructure and data centers, raising the question of how long this spending cycle can support current valuations.
Wall Street has discovered an old rule again:
🔥 When everyone rushes to the same side, all it takes is a shift in sentiment to turn momentum into a drop.
The question now isn’t just which stocks will keep going up.
It’s: who will be stuck when momentum finally runs out?
$NVDAB $AMDB
#WallStreet #Stocks #Nasdaq #SP500 #AI #Nvidia #AMD #Investing #Markets #Finance
