All the hottest trades on Wall Street have cooled off.

By He Hao

Source: WallStreetCN

From tech stocks to gold and cryptocurrencies, Wall Street’s hottest trades—previously swarmed by capital daily—have now undergone a sudden, broad-based flight to safety.

This time, there is no single trigger—unlike last April, when panic-driven selloffs erupted after U.S. President Donald Trump launched a trade war. Instead, a series of gradually accumulating developments have sounded repeated alarm bells, sparking market anxiety over asset valuations—valuations many investors had long suspected were inflated—and ultimately prompting near-simultaneous investor exits.

Thursday’s market action reinforced this trend:

The S&P 500 fell 1.2%, marking its third consecutive trading-day decline; the Nasdaq-100 extended its losses, posting its steepest correction since last April.

Software stocks continued their slide, as AI firm Anthropic unveiled a new model designed for financial research—highlighting competitive threats posed by emerging technologies.

Silver prices plunged 17%, erasing earlier record highs achieved alongside gold.

Bitcoin tumbled 10% in a single day, wiping out all gains since Trump’s election victory 15 months ago, as investors began unwinding leveraged, loss-making positions.

U.S. Treasuries rebounded, reaffirming their traditional role as the “last resort” safe haven.

Alphabet—the parent company of Google—faced downward pressure despite beating revenue expectations, following the announcement of an ambitious new spending plan.

After Thursday’s U.S. equity close, Amazon’s stock plunged 10%, as the company revealed plans to invest $200 billion this year—far exceeding analyst expectations—and heightened concerns among analysts already wary of excessive AI-related spending by tech firms.

Recent market moves stand in stark contrast to Wall Street’s sentiment at the start of the year, when strategists forecast the longest U.S. equity rally in nearly two decades. These projections rested on several assumptions: that the AI boom would persist, that the resilient economy would continue supporting corporate profits, and that the Federal Reserve would cut interest rates.

Much of this overall outlook remains intact—as evidenced by solid earnings reports released over recent weeks. Yet markets are also refocusing on a growing list of risks:

• Which companies will be displaced by the AI wave;
• What direction monetary policy will take if Trump-nominee Kevin Warsh succeeds Jerome Powell as Fed Chair;
• And whether valuations for assets—including gold, Bitcoin, and tech giants like Alphabet—have become unsustainable over the long term.

Momentum stagnation is especially evident in Bitcoin:

For most of last year, speculation fueled by Trump’s election victory drove rapid cryptocurrency price gains—but this month, massive investor withdrawals triggered a collapse.

On Thursday, selling intensified as the trading day progressed, dragging down other cryptocurrencies, related ETFs, and so-called “crypto treasury” firms—including Strategy—that hold large Bitcoin positions.

Late Thursday afternoon in New York, Bitcoin briefly plunged 13%, falling below $63,000—nearly halving from its all-time high reached four months earlier.

In equities, declines were relatively modest but broadly distributed: nine of the S&P 500’s 11 major sectors posted losses. Beyond fears about which companies may lose out in the AI wave, investors are questioning whether massive investments in the technology will ever yield returns—Alphabet’s share price decline reflects precisely this concern.

Industry insiders commented on these developments:

“Clearly, investors are shifting toward more defensive strategies. It’s a ‘shoot first, ask questions later’ market environment. Fear and uncertainty across the board are palpable.”

“The recent pullback reflects market concerns that the hottest stocks—and assets like gold—rose too fast and were overdue for a ‘reckoning.’ This is a reset. Momentum may simply have been exhausted.”