In a week that felt like a rollercoaster, investors were battered by sharp swings in major indices, a collapse in the Korean stock market, and a dramatic selloff in SpaceX shares following its IPO. The latest episode of DH Unplugged, hosted by Andrew Horowitz and John C. Dvorak, delved into these events, offering a skeptical take on the market's recent turbulence and the narratives surrounding artificial intelligence.
The Dow experienced a 1,000-point gain followed by a 700-point drop, reflecting the whipsaw nature of trading driven by Big Tech earnings. Amazon briefly crossed the $3 trillion market cap before retreating, while Apple fell 7% after warning of rising memory chip costs. These moves underscored the market's sensitivity to earnings guidance and supply chain pressures. Meanwhile, Palantir surged 26% on strong results, but AMD dropped 8% in after-hours trading, highlighting the divergent fortunes within the tech sector.
Beyond U.S. shores, the KOSPI index suffered a devastating rout, wiping out billions in value and hitting retail investors particularly hard. The hosts pointed to the proliferation of single-stock leveraged ETFs as a key amplifier of the crash, with an estimated 350,000 Korean retail accounts blown out. This event serves as a stark reminder of the dangers of leveraged products in volatile markets.
In a segment on SpaceX, Horowitz did not mince words, calling the post-IPO slide a "rug pull." With insider selling, expired lockups, and a lack of syndicate support from major banks like Goldman Sachs and Morgan Stanley, the stock tumbled from $135 to $108. The hosts also noted a Starlink subscriber miss and $40 billion in new debt priced toward junk status, painting a picture of a company facing significant headwinds despite its pioneering role in space exploration.
The conversation then turned to the AI sector, where Dvorak expressed deep skepticism about the safety marketing campaigns from companies like OpenAI and Anthropic. He argued that the "capture the flag" breakout stories and the constant warnings about AI killing us all are part of a "regulatory moat play" designed to ward off competition. Horowitz countered that whether the companies are manipulating narratives or genuinely incompetent, the effect is unsettling for investors trying to price the sector. This debate comes amid Reddit's 20% plunge on weak AI licensing demand and Meta's earnings miss tied to its Scale AI acquisition.
Other topics included housing market imbalances, with Miami now showing roughly 140 sellers for every 100 buyers, and the hosts comparing stuck listing prices to unsold Beanie Babies on eBay. They also touched on TSMC's additional $100 billion investment in Arizona, Delta's confidence in sticky higher fares, a massive egg recall due to salmonella, and the PCE inflation rate stuck at 3.3% core. A fresh 50% tariff on Canadian goods added to the economic uncertainty.
As the episode concluded, Horowitz and Dvorak left listeners with a sense of caution, emphasizing the need for vigilance in a market driven by speculative fervor and algorithmic trading. The events of the week serve as a reminder that while the market can offer tremendous opportunities, it also carries significant risks, especially for those who are unprepared for sudden reversals.
