The market is doing what, exactly? (Getty Images)

Grin and bear it

Everything is deep red today — which stocks are most, and least, sensitive to a market crash?

Nvidia, cruise companies, and tech stocks are historically sensitive to the market. Defensive names like Campbell’s and General Mills might hold up if everything goes south.

Hyunsoo Rim, David Crowther

3/4/25 12:23PM

The S&P 500 posted its biggest daily loss of the year on Monday after President Trump confirmed his tariff plans: 25% on Canada and Mexico and a doubling of levies on China to 20%, starting today.

And in early trading on Tuesday, investors have picked up right where they left off, with a flurry of sell orders sending markets deep into the red and the S&P 500 Index down 1.5% at the time of writing.

If you’re nervous that this latest market bump could turn into a broader meltdown, which stocks would be most likely to get dragged down with the S&P 500?

Before we get into it, let’s define beta. Beta measures how sensitive a stock has historically been to the overall market. Sadly, it’s not a crystal ball, but just a useful tool to tell us about what’s happened historically. A beta of 1 means that a stock has historically moved in line with the market, above 1 suggests that a stock has been more volatile than the market, and below 1, the opposite — the stock has typically moved less than the markets move.

With that in mind, based on a three-year look back, data from FactSet reveals which stocks have the highest beta to the S&P 500.

At the top of the list is cruise company Carnival, which, with a beta of 2.8, is even more correlated to the swings of the market than volatile AI leader Nvidia (2.4). Tesla, which has now shed almost all of its postelection gains, is 17th out of the ~500 names in the index, with a beta of 1.8. That means that, based on historical averages, if the market gained 1%, Tesla would jump 1.8%.

Other cruise stocks, like Norwegian and Royal Caribbean, also find themselves on the list of stocks most sensitive to the market, as does automaker Ford with a beta of 2.1. Highly cyclical companies, which need a stronger consumer to buy their discretionary products, might not be the safest part of the market to play in if you expect the red days to keep coming.

DEFENSE, DEFENSE

Meanwhile, sectors that traditionally perform well in uncertain times have held up better overall this year, with healthcare, real estate, and consumer staples the top three sectors in the S&P 500 so far this year.

Interestingly, however, topping the list of stocks with the lowest beta is aerospace and defense giant Northrop Grumman, with a very modestly negative beta — implying that the company’s stock usually takes no notice of what the market does, and on balance actually does the opposite more times than it follows the index.

Also in the “least sensitive” list are consumer staples names like Campbell’s and Kraft Heinz, companies that tend to sell foodstuffs that are sought after by folks with nuclear bunkers who are preparing for the end of the world.

Of course, correlations are just that: they’re correlations. They can tell us what has happened coincidentally in the past, but they don’t tell us why, and they aren’t always as useful as we’d like them to be in predicting the future. And, as the saying goes, “In a financial crisis, all correlations go to one.”

Matt Phillips24m

Space, drone, and satellite stocks continue their Iran war-driven rally

Space, drone, and satellite stocks like Rocket Lab, Redwire, Intuitive Machines, and Planet Labs are both outperforming broader indexes and the thematic baskets of momentum stocks and shares with high retail sentiment with which they are often lumped.

There’s little clear news on the tape to attribute for the move higher. (Though the FAA did announce a streamlining of launch licensing rules that cover a number of these companies, including Rocket Lab and Firefly Aerospace, as well as Tesla CEO Elon Musk’s commercial space giant, SpaceX.)

More broadly, the outbreak of war with Iran has burnished the space, drone, and satellite sector in the eyes of investors, as the conflict underscores the importance of the three technologies to the future of defense. And in a world where nations are growing unsure of traditional alliances, countries across the board will look to boost their own capabilities. (Belgium just announced that it has selected Redwire, for example, to provide its first national security satellite system. Belgium!)

As Goldman Sachs analysts put it in a research note from January:

“Companies with native drone and satellite technology cultures like AeroVironment and Rocket Lab may find themselves particularly well positioned. And in Europe, a remilitarization of the Continent is underway that could require a $160bn investment over the next 5 years just to catch up with Russia.”

Since the start of the Iran war, most of these types of shares have handily outpaced the Nasdaq Composite Index. Rocket Lab, Redwire, and Intuitive Machines are all up more than 12% during that period, compared to a Nasdaq that’s just slightly in the red, as of shortly before 12 p.m. ET on Tuesday.

Nvidia keeps giving Wall Street everything it wants — without getting rewarded

Yet another case of good financial news from Nvidia failing to generate an enduring positive reaction.

Luke Kawa1h

Matt Phillips2h

Oklo surges after receiving approval for next phase in the construction of its first reactor

Revenue-free retail favorite Oklo is up in early trading after announcing regulatory updates on its first product, a reactor it calls Aurora, which it has started building at the US Energy Department’s primary nuclear energy research and development center, the Idaho National Laboratory.

Oklo announced that it signed an “other transaction agreement” (OTA) with the Department of Energy early Tuesday. (OTAs are typically used by the federal government to enter into research, prototyping, and production deals with private entities outside of the typical procurement processes.)

Oklo also announced that the DOE’s Idaho Operations Office also signed off on a preliminary safety design review for the reactor, which is expected to be completed sometime in late 2027 or 2028. The company broke ground on the project in September.

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Given the close involvement of the federal government in the development of nuclear power plants, Oklo’s close ties to the Trump administration have been seen as an important advantage for the company — but have also drawn scrutiny and criticism.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Oklo Announces U.S. Department of Energy Approval for Nuclear Safety Design Agreement of Aurora Powerhouse at Idaho National Laboratory

Separately, Oklo also announced that the Nuclear Regulatory Commission issued a materials license enabling an Oklo subsidiary to handle, process, and distribute isotopes.

“This is Oklo’s first NRC-issued license and supports the transition from design and planning to real-world execution and progress,” the company said.

Energy Secretary Chris Wright was formerly a board member at Oklo, before he was tapped to lead the Trump administration’s Department of Energy.

The department is playing a more prominent role in the nuclear regulatory process under an executive order designed to speed up approval of new nuclear energy technologies.

Separately, Oklo is due to report earnings after the close of trading on Tuesday.

Luke Kawa

The emerging 2-tier system for moving oil through dangerous waters

The road less traveled, or the waters more mined.

J. Edward Moreno3h

Eli Lilly receives its only sell rating as HSBC downgrades, citing smaller market for weight-loss drugs

Eli Lilly slipped in early trading after analysts at HSBC gave the pharmaceutical darling at the center of the obesity drug boom a rare downgrade.

Analysts at the bank cut their rating to “reduce” from “hold.” They cut their price target to $850 from $1,070. The stock closed at $989 on Monday.

“We think Lilly shares are priced to perfection, are uncomfortable with working capital trends, and think medium-term earnings trends are optimistic,” the analysts said.

According to Bloomberg, this is the only sell rating on Lilly among the 38 analysts who cover the stock.

The company has rallied more than 20% in the past year as its obesity drug sales continue to rise, far outpacing its top rival, Novo Nordisk.

But the space is getting increasingly crowded with new entrants and new products from Lilly and Novo, putting downward pricing pressure on their products. HSBC noted that the emergence of cash-pay channels for their drugs makes them subject to economic cycles and seasonality.

And while the introduction of oral options has expanded the market, HSBC analysts said they think “the compliance and persistence of these drugs might disappoint.”

“Whilst the momentum in the launch might be positive, we think oral drug launch expectations for Lilly are too high,” they said.