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Posted November 7, 2025 at 9:30 am
*The buy-the-dip impulse still seems to be missing.
*Market participants have become more discerning in their review of earnings results.
*The Russell 3000 Growth Index is down 2.7% for the week.
The mega-cap stocks and growth stocks have had a tough time this week. Those tough times don’t appear ready to end just yet. There will be some carryover, at least at today’s open.
Currently, the S&P 500 futures are down 20 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 122 points and are trading 0.5% below fair value, and the Dow Jones Industrial Average futures are down 97 points and are trading 0.2% below fair value.
Those aren’t material losses that are indicated, yet they reflect a lack of buying interest that, itself, has kept many participants sidelined, recognizing that there has been a tempering of the buy-the-dip impulse.
That impulse could reappear at any time, of course, but participants look content to let the price action be their guide, and it is currently guiding prices lower.
There hasn’t been much macro news to push things along today. China reported some underwhelming import and export data for October; meanwhile, the government shutdown is becoming a real travel nuisance as it contributes to flight cancellations across the country.
The storyline ahead of today’s open, however, is really about earnings and how the market has not been in a rewarding mood. Sure, there have been some big winners after their earnings results, but there have also been some really big losers.
That dynamic can be seen again today, with stocks like JFrog (FROG), Expedia (EXPE), and Affirm (AFRM) among the big winners, and stocks like Sweetgreen (SG), Block (XYZ), and DraftKings (DKNG) among the big losers.
The differentiating point this week, though, is that market participants are being more discerning in their review of earnings results and guidance and more punishing when those items don’t live up to expectations. The bad news isn’t being disregarded in favor of a general momentum trade that makes everything look and feel better.
On the contrary, this week has been marked by a loss of momentum in the stocks that had carried the market to record heights. What the market is in the midst of discerning is if this loss of momentum is a simple profit-taking consolidation or the start of a larger valuation-driven correction.
Our sense of things leans to the former since there hasn’t been a source of real fundamental upset this week. Moreover, things got rolling (literally) after Palantir Technologies (PLTR), a momentum darling, put up terrific earnings results and traded sharply lower after doing so.
Some moves just get carried away sometimes (think Bitcoin and gold as well) and need to be reined in for their own good. The reins, for now, are being pulled back on the mega-cap stocks and the growth stocks.
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Originally Posted November 7, 2025 – Still pulling back on the reins
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