Nvidia’s slump continues even after Jensen Huang softens his statement that “China is going to win the AI race”

The high-flying, more speculative pockets of the market are getting crushed today, after ripping higher yesterday, which was preceded by them getting slammed on Tuesday.

So if you think volatile stocks beloved by retail traders have been, well, more volatile lately, you wouldn’t be wrong.

Two baskets compiled by Goldman Sachs that track “non-profitable tech” and “high-beta momentum long” stocks have seen their annualized 21-day realized volatility spike to levels not seen since May — that is, when the carnage of early April’s mauling after the announcement of reciprocal tariffs was still in the observation window.

As we’ve recently discussed, these two cohorts have effectively been a version of the “corporate wants you to find the difference between these pictures” meme for the past few months. In other words, they’re swinging in unison.

“In contrast to the behavior observed during the post-Liberation Day selloff, retail investors did not seize the opportunity to buy-the-dip on Tuesday, with a few exceptions such as META,” writes JPMorgan strategist Arun Jain. “In fact, they scaled back their ETF purchases and turned net sellers in single stocks.”

The S&P 500 is less than 3% off from its all-time high. When volatile stocks were this jumpy ahead of those aforementioned Rose Garden decrees, the benchmark US stock index was already nearly 10% off its peak.

Names that broadly fit the retail-cherished, high-beta descriptor and have a loose relationship with profitability include Oklo, IREN, Cipher Mining, POET Technologies, CoreWeave, SoundHound AI, Plug Power, Rigetti, Bloom Energy, Opendoor Technologies’, and D-Wave Quantum. They’re all down big on Thursday.

If you think the stock market has played an important role in supporting US consumption this year, you can make an argument that this is the kind of thing that could have a negative impact on economic activity. In an asset-backed economy, high-beta speculative momentum stocks might actually be the real cyclicals.

The same day that tariff-exposed stocks soared as traders judged that the Supreme Court was likely to rule against a large portion of President Trump’s tariffs, e.l.f. Beauty showed just how much these changes to cross-border commerce are crushing select businesses.

The beauty retailer reported disappointing Q2 results after the close on Wednesday, with both net sales and adjusted earnings per share well below estimates, and offered full-year guidance that was shy of the Street’s view on both of those metrics as well.

The stock is down roughly 34% in early trading, which would be a record loss if it fails to recover during today’s session.

On the conference call, Chief Financial Officer Mandy Fields laid out in stark terms just how onerous the operating environment is for the retailer:

“To set the foundation, about 75% of our global production today comes from China. Between April 9 and May 13, we were subject to tariffs at the 170% level. From May 14 through the end of October, product imports to the U.S. were subject to tariffs at the 55% level. As of November, we are now subject to a lower tariff at the 45% level given the recent reduction announced by the administration.”

Every 10% tariff increases e.l.f.’s cost of goods sold by $17 million on an annualized basis, per the company’s earnings presentation. The company delivered an across-the-board $1 increase in a bid to offset higher costs, but that wasn’t nearly enough to prevent gross margins from sinking by about 165 basis points compared to the same quarter a year ago.

Krispy Kreme is leaning on some of America’s biggest retailers in a bid to make sure its doughnuts aren’t the only dough it’s making.

Josh Charlesworth, CEO of the glazed snack seller, told The Wall Street Journal the company is focusing on its distribution partnerships with the likes of Walmart, Target, and Costco — places with heavy foot traffic — as part of an optimization push to boost profitability.

On the company’s Q3 earnings call Thursday morning, management indicated that they’ve outsourced 54% of their US logistics and plan to outsource 100% next year.

Krispy Kreme might be known more for its belt-widening efforts, but it’s the belt-tightening moves that have traders enthusiastic on Thursday. The heavily shorted company is catching a bid as traders warm to these turnaround and cost-cutting efforts amid a mixed bag of Q3 results. Net revenues of $375.3 million were shy of the consensus estimate for $381 million, but the company did manage to book adjusted earnings per share of $0.01, while the Street had anticipated a loss of $0.07 per share.

And, as expected from this sporadic meme stock, call activity is running hot: a little more than half an hour into the session, call volumes of 7,555 have nearly eclipsed the stock’s five-day average of 7,957 for a full session. The three most active contracts are call options that expire this Friday with strike prices of $4, $5, and $4.50.