High-beta momentum stocks on track for worst day since Trump’s April tariff announcement

Goldman Sachs’ High Beta Momentum Long stock basket of “highly reactive & tradable past winners” is having its worst day — down about 8% — since April 3, the day after the president announced the much more severe tariff regime than Wall Street had expected in his famed Rose Garden presser.

This isn’t just an oddity for Goldman’s high-beta momo basket — whose heaviest weightings include highfliers like Palantir, Applied Digital, Bloom Energy, and Sandisk, among others.

By harkening back to the April tariff shock, today’s tumble also underscores the sense of investors suddenly waking up to a range of serious risks that just a few weeks ago were widely and easily shrugged off.

For instance, Fed rate cuts that the market had been expecting to continue after September is now a less sure thing. Pricing from the CME’s FedWatch tool pegs the odds of a cut at next month’s meeting at roughly a coin flip, after a series of hawkish comments from Fed heads. (A month ago, the odds of another cut were close to 100%.)

Likewise, the consensus view that the hundreds of billions of dollars corporations are dumping into data centers will be easy to finance and inevitably profitable bets seems to be coming in for more scrutiny, especially over in the bond market.

And don’t forget about the blanket of fog surrounding the US economy, where it could still be weeks before government number crunchers get back into gear after the shutdown and are able produce an accurate picture of where the US economy and labor market actually are, even as we continue to get hints of fairly chunky layoffs to come.