Luke Kawa12/17/24

Major US stock indexes sink as volatile retail favorites soar

The S&P 500 and Nasdaq 100 each fell 0.4% while the Russell 2000 slumped 1.1% on Tuesday.

Your daily confirmation that market breadth was bad: the S&P 500’s advance-decline line was negative for its 12 straight session, surpassing a streak set in September 2001.

Consumer discretionary was the lone S&P 500 sector ETF to advance on the day, thanks in large part to Tesla’s 3.6% jump. Industrials and financials fared the worst. Chip stocks gave back some of their big gains following Broadcom’s earnings, with the VanEck Semiconductor ETF down 1.3%.

A lot of the most exciting trading activity is happening outside S&P 500 companies in more volatile names that retail traders have taken a shine to. GameStop booked a 6.3% gain for its highest close since the session before Keith Gill’s livestream in June amid options wagers positioning for a massive spike in the shares by mid-January.

The quantum-computing theme is also in full bloom, with Rigetti Computing and Quantum Computing up more than 30% and 50% on the day, respectively.

This speculative fervor has a big footprint in markets: more money changed hands today trading any one of Quantum Computing, Rigetti Computing, and SoundHound AI than either Visa, Netflix, Oracle, or JPMorgan.

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Max Knoblauch5h

American Eagle posts stronger-than-expected Q4 earnings and revenue

If American Eagle has seen farther, it is by standing on the shoulders of Sydney Sweeney.

The jeans seller posted adjusted earnings of $0.84 per share, ahead of the $0.71 expected by analysts polled by FactSet. It booked $1.76 billion in fourth-quarter revenue, versus the $1.74 billion consensus.

Shares initially climbed more than 5% after-hours before paring gains to about 2%.

“Compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter,” said CEO Jay Schottenstein.

American Eagle said it’s expecting same-store sales to grow by high single digits in the first quarter.

Marketing controversy has proved to be a powerful mover of denim for AE. In its third-quarter earnings call in December, AE said its partnership with Sydney Sweeney — together with a Travis Kelce partnership — had garnered more than 44 billion impressions. The retailer hit meme stock status last July when it initially launched its “Sydney Sweeney has great jeans” campaign.

As of Wednesday’s close, American Eagle shares had climbed 120% since the Sweeney ad first landed.

Broadcom posts modest Q1 sales and earnings beats

The custom chip specialist just reported Q1 results.

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Rigetti Computing posts Q4 sales that fall short of expectations

The quantum computing firm just posted Q4 results.

“Euro-Q-Exa" quantum computer

Tasha Matsumoto

Stocks rebound as investors’ risk appetite resumes

Investors shifted their focus from the war in Iran, resuming a risk-on mood amid surprise economic data.

Josh Giddey #3 of the Chicago Bulls grabs a rebound during the second half against the Detroit Pistons on October 22, 2025 at the United Center in Chicago, Illinois.

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Investors are itching to buy the dip in memory stocks

The intense drubbing in South Korean stocks, with the benchmark Korean index (KOSPI) falling nearly 20% in its first two trading days of the week following a Monday holiday, represented a serious threat to the hottest AI trade: memory stocks.

South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung.

After Tuesday’s tumble, US investors seemingly said enough is enough: it’s a buy-the-dip opportunity.

US memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings are posting massive gains on the day. The advance comes amid positive commentary at a Morgan Stanley conference on demand for memory chips.

Even more interestingly, the iShares MSCI South Korea ETF is up big today despite the KOSPI falling 12% overnight, its largest drop on record. The ETF’s outperformance of the South Korean equity gauge is the largest since 2008, as the global financial crisis raged.

The daily performance of these two can differ materially since they trade at different times and don’t track precisely the same things. US investors are making the bet that a potential break in this momentum trade and the potential for an unwind of retail leverage in South Korean markets be damned, big drops in memory stocks are meant to be bought.

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