Retail traders dumped momentum stocks during Tuesday’s rout with first net selling in two months

During Tuesday’s momentum stock mangling, retail traders did something they haven’t done in two months, according to JPMorgan: sell stocks.

“Notably, the retail investor behavior changed during the Tech selling in the past two days breaking their two month long daily buying streak (+$1 billion average/day) to become net sellers (-$140 million) on Tuesday,” JPMorgan strategists led by Arun Jain wrote.

Per Jain, retail traders bought the dip in the overall market, but sold single high-flying stocks like Palantir Technologies, Broadcom, and Reddit in size, “thereby accelerating their year-to-date trend of moving from single stocks (-$1.0 billion) to ETFs (+$883 million).”

Add this to the list of ways the expanding retail footprint is influencing, and in some cases dictating, price action.

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SpaceX received more than a dozen positive analyst calls on Tuesday — including from major Wall Street banks — as they initiate coverage on Elon Musk’s space and AI company.

SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

Still, SpaceX fell more than 5% on Tuesday amid a broader sell-off, and is currently effectively flat from its opening price of $150 a share.

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