Nobody knows exactly why.
But the densest cluster was the chipmakers: Marvell, which dropped 10% in a day after jumping 10% on news it’s joining the S&P 500, and the rest of what strategist Ben Emons has dubbed the “Parabolic 7,” after a chip index that ran up nearly 100% in a matter of weeks.
“You’re seeing money flow into consumer names that have been unwanted and unloved,” Richard Steinberg, senior global market strategist at Focus Partners Wealth, told the Wall Street Journal.
Also this week, inflation data lands Wednesday and Thursday, and a strong May jobs report last week has already pushed expectations for rate cuts further out. Funds tend not to sit in their most crowded, highest-beta positions going into an inflation reading that could move the Fed’s path, which could be why some froth got cut off now.
The selling may also be less about selling than an absence of buyers. Founder ETFs’ Michael Monaghan described it as buyers stepping back rather than a rush for the exits, dropping the price faster than the volume would suggest.
Oil went the other way. Even after President Donald Trump said the U.S. would have to respond to Iran’s downing of a U.S. Army Apache helicopter near the Strait of Hormuz, crude fell about 3% to roughly $88, as the energy secretary said traffic through the Strait was picking up meaningfully.
Certainly investors are now wondering if this is the start of a longer “pop” or just a one-time correction. For them, the best information will come as SpaceX debuts, and public capital gets to decide if they believe in the AI story or not.
