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Another Fight Test for the High Flyers
RiskReversal Recap: Wednesday, August 20th
RiskReversal Media
August 20, 2025
MARKET WRAP
Markets saw a follow-through from yesterday’s selling that rattled nerves early, but buyers stepped in and pushed stocks back towards unchanged later in the day before closing modestly lower. The Nasdaq was the worst performer with some recent semi, AI and crypto darlings’ momentum put to the test once again. On the day: SPX -0.2%, QQQ -0.6% and IWM -0.3%
Elsewhere, the US10YY was lower morning but popped a tad after the FOMC minutes, finishing 4.29%. Oil bounced, as did gold. The VIX got above 17 early before a slam into the close, now 15.69. DXY was unchanged.
Notable Gainers: ADI +6.2%, TXN +2.5%, CAT +1.1%, WMT +1.3%, REGN +3.4%, TJX +2.6%
Notable Losers: MU -4%, DELL -5%, INTC -7%, ADBE -2%, AAPL -2%
After hours: SPY and QQQ a small tick lower after hours. Walmart reports before the open tomorrow.
MRKT Call: Dan and Guy try to put their finger on why momentum stocks began to get hit all of a sudden. A look at MSFT and whether we just saw a blow-off high in it. Recent action in stocks like NVDA and PLTR. Finally, a check-in on Gold and Nerd Gold.
RiskReversal Pod: Liz and Guy discuss the recent rotations amidst some momentum stock corrections. The resilience of the retail trader, the risks of heavy concentration within portfolios, recent retail earnings, a look ahead at Jackson Hole, the yield curve and more.
MRKT MATRIX: TODAY’S TOP STORIES
Nasdaq falls for a second day as tech struggles again (CNBC)
Trump Demands Fed’s Cook Quit as Pulte Seeks Mortgage Probe (Bloomberg)
Trump Embarks on $104 Million Bond-Buying Spree While in Office (Bloomberg)
Elon Musk Pledged to Start a Political Party. He Is Already Pumping the Brakes. (WSJ)
Target Picks Insider as CEO to Lead Turnaround; Shares Drop (Bloomberg)
McDonald’s to Cut Combo-Meal Prices After Convincing Franchisees (WSJ)
Oracle Rides Major Deals With OpenAI, Nvidia to Turn Around Cloud Business (Bloomberg)
Databricks says it’s valued at over $100 billion in latest funding round (CNBC)
SpaceX’s Expensive Starship Explosions Are Starting to Add Up (Bloomberg)
WHAT’S NEXT?
The real story the past week has been under the surface, where momentum names have taken some eye-popping hits. We flagged PLTR yesterday, and today it briefly dipped to $143—down from $188 just a week ago. That’s a nearly -25% slide before finding buyers this morning. These are the kinds of moves that have active traders on edge the past week, even as the broader indices have only seen modest declines. Many of these names had massive runs in recent months and gapped higher on earnings. The key question from here: does this weakness spill over into the broader market, or is it simply profit taking in some names after huge runs?
From a market backdrop standpoint, SPX lost the 6400 level today like it was nothing, but bounced near 6350. As we noted yesterday, today’s VIX expiry—coming right after last week’s monthly options expiry—can sometimes mark turning points in volatility. Moves lower are much less supported this week than last. Additionally, if Friday’s Powell speech sparks follow-through selling, we could finally see meaningful put buying for the first time in a long time. Perhaps targeting the 6200 area in SPX (the post FOMC meeting lows). That kind of flow not only drives near-term vol higher but often clears the path for the market to get more volatile.
On the flip side, a shallow sell-off without follow-through can actually slingshot the market as recent sellers rush to get back in before new highs. As mentioned, the 6500 area carries heavy overhead supply—unlikely to be broken in a slow grind near term, but very much in play if another round of sudden FOMO (after a shallow pullback) kicks in post Jackson Hole/Nvidia.
Thursday, August 21st
Jackson Hole Symposium
Pre-market: WMT 4.4%
8:30am - Initial Jobless Claims
8:30 - Philly Manufacturing
9:45am - S&P Global PMI
10am - Existing Home Sales
After-hours: ZM 7%, WDAY 7.5%, ROST 5.5%, INTU 5.5%
TODAY’S EPISODES
Watch MRKT Call’s newest episode:
Dan and Guy try to put their finger on why momentum stocks began to get hit all of a sudden. A look at MSFT and whether we just saw a blow-off high in it. Recent action in stocks like NVDA and PLTR. Finally, a check-in on Gold and Nerd Gold.
Analysis - S&P e-mini, Nas e-mini, MSFT, NVDA, PLTR, TLT, BTC, GLD, MSTR
Learn more about our sponsor, CME Group.
Watch RiskReversal Podcast’s newest episode:
Dan Nathan and Liz Thomas of SoFi discuss recent market activities including rotations and weaknesses in certain sectors, earnings reports from major retailers like Home Depot, Lowe's, and Walmart, and the impact of the Kansas City Fed Symposium in Jackson Hole. They explore the implications of stock market concentration in the S&P 500 and Nasdaq, the potential long-term benefits of AI and technological investments, and the likelihood of Fed rate cuts amidst political and economic headwinds. Liz also mentions the retail trader's resilience and the volatility in both stock and bond markets due to shifting interest rate policies.
Timecodes: 0:00 - Intro 3:05 - Concentration 8:15 - Poster Children 14:00 - J-Hole & Fed Speak 19:40 - Yield Curve 24:15 - Long View
Learn more about our sponsor Betterment, Current, and RBC Capital Markets.
