Hello, I'm Eric Criscuolo, Market Strategist at the New York Stock Exchange, and this is Market Storylines. Every week, we’re here to keep you up to date on the key trends and events driving global markets. As we record on Thursday afternoon, let’s dive into this week’s Market Storylines.

I have two young kids, who are incredible, but have also made me an expert on meltdowns. While I usually deal with them in my living room or in department stores, this week I got to experience them across financial markets. One type in particular: the momentum meltdown.

Stocks that fall into the momentum, FOMO, high beta and / or meme categories came under heavy selling pressure earlier this week. Neo data centers were down 10-25%. Many crypto miners and related stocks were down 10-20%. Quantum computing stocks were down even more- we’ll get back to those in a minute.

The momentum meltdown wasn’t just taking place in equity markets. Gold and other precious metals, which have been on an absolute tear, also came under pressure. Gold futures began the week trading at all-time highs, around $4400. However they fell sharply on Tuesday and Wednesday, down about 10% to around $4000. Silver, platinum and palladium also saw similar price action.

There are a variety of reasons for this MOMO meltdown. Overbought conditions and overstretched valuations have been a constant overhang, especially for higher risk assets. There’s a lingering hangover from the recent deleveraging in crypto. Bankruptcies in subprime lending shook some of the financial sector, and investors were concerned that the next shoe to drop would be a steel-toed Timberland instead of a penny loafer. Trade headlines continue to be volatile, gyrating between “Everything will be OK” to “Well guess what, now this is happening…”. That all piled on top of each other and the assets that have seen parabolic moves staggered under their own weight.

I don’t want this to sound too dramatic though. The initial bout of selling pressure has eased, and markets are stabilizing as we approach the end of the week. For stocks, it’s been nine straight days that the S&P has traded within the huge 200 point intraday range we saw on October 10. The dips are getting bought. The S&P’s 50 day moving average around 6590 has held up as support, and the index is trading just below its record highs. The momentum meltdown…has melted down, and it was contained to specific parts of the market. For the week, the S&P is up 1.2% and the equal-weight index is even better, up 1.6%. Even small caps have fared well overall with the Russell 2000 up 1%.

One of the reasons for this stability is that companies continue to report generally solid earnings. Those credit concerns have not become contagion. Outside of a few instances, banks are reporting strong credit metrics. Mega cap stocks have held up well. 12 of the 20 largest stocks are up so far this week, from 1-3%. The others are only down modestly outside of Netflix. Meanwhile, other sectors have assumed leadership this week as Healthcare, Industrials, Discretionary and especially Energy rotated to the top. Energy’s strength is coming as Brent crude bounced off of $60 and then ripped higher on several geopolitical events: India potentially ending its purchases of Russian oil, and new US sanctions on the Russian oil industry.

In crypto things have stabilized as well. Bitcoin has traded between its 200 day and 50 day moving averages the past six days. Treasury yields are largely unchanged from last week’s levels. The Dollar however has moved higher, especially against the Yen after Japan’s new Prime Minister took office, but it remains subdued.

Another catalyst for the reversal of the momentum meltdown was a report that the administration was in talks with those quantum computing companies we mentioned earlier. The government would take equity stakes in them in exchange for federal funding, a broadening of earlier actions in other companies by the administration. That sent those stocks ripping higher today.

Let’s close out with a look ahead. On Friday we’ll get the updated Consumer Price Index despite the government still shut down, which is currently on Day 23. That will be a key piece of data for the Fed before next week’s rate decision on Wednesday. The flash S&P PMIs for October will also be released on Friday, and Treasury Secretary Bessent will resume trade talks with Chinese vice premier He Lifeng in Malysia. President Trump is scheduled to finally meet President Xi in South Korea next Thursday. Lastly, earnings will continue to be in the spotlight and will include the megacap tech names. Their commentary is vital for the future path of the broad AI trade.

That’s wrap on this week. Remember you can watch Market Storylines on TV.NYSE.com or on the NYSE YouTube Channel. You can also listen every Friday on the Inside the ICE House Podcast feed. Thanks for joining me. I’m Eric Criscuolo. We’ll talk to you again next week.