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Luke Kawa

US stocks are undergoing an unwind of the unwind

The AI trade is bouncing back, and boring consumer staple stocks are getting crushed.

The S&P 500’s retreat from all-time highs has been marked by an unwind of the momentum trade, which became heavily linked to AI. These stocks have faced seemingly unrelenting selling pressure since February 19, after Walmart issued an underwhelming 2025 outlook. Many safe, boring stocks enjoyed decent rallies over this time.

We’re now seeing the unwind of that unwind.

This is a continuation of what we saw during Tuesday’s sell-off, which brought some encouraging signs under the hood about the repair in this beaten-down factor: iShares MSCI USA Momentum Factor ETF rose while the lower beta stocks in iShares MSCI USA Min Vol Factor ETF fell.

As of about 11:30 a.m. ET, only one stock in the S&P 500 that fell 30% from February 19 through Monday is down over the past two sessions: HP Enterprise. Most are ripping, with CrowdStrike, Super Micro Computer, Tesla, and Vistra up double digits since Monday’s close. And every single stock that was up at least 10% from February 19 through March 10 has since declined.

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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.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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