What Just Happened on Wall Street?

By John Ian Lau


For Solomon Grey Capital Newsletter

In one of the most violent reversals in modern market history, the S&P 500 opened up 1.4 per cent, traded as high as 6,800, and closed down 1.5 per cent at 3,616. That intraday swing of more than 4.3 percentage points from peak to trough marks only the third such occurrence since 2000. The previous two were 7 April 2020 (COVID volatility) and 8 April 2025 (post-Liberation Day shock).

Goldman Sachs’ trading desk described the session as a “perfect storm” of overlapping pressures. Here is what actually moved the tape.

1 Nvidia’s post-earnings fade
Q3 revenue of $57.01 billion and EPS of $1.30 both beat consensus, and Q4 guidance was raised. Yet the stock fell 7 per cent in regular trading after an initial after-hours pop. Goldman’s head of Americas equities trading, John Flood, noted on a client call: “When really good news is not rewarded, that is usually a bad sign.”

2 Private-credit warnings from the Fed
Governor Lisa Cook explicitly highlighted “potential asset valuation vulnerabilities” in the $1.7 trillion private-credit market, citing complexity and interconnections with leveraged borrowers.

3 September payrolls underwhelmed
The delayed report showed only 119,000 jobs added against a 150,000 expectation, pushing December rate-cut odds to roughly 35 per cent (CME FedWatch) — directionally dovish but not decisive.

4 Bitcoin broke below $90,000
The first breach of that psychological level in seven months triggered $3.7 billion of ETF outflows in recent weeks and accelerated risk-off sentiment.

5 Systematic selling accelerated
CTAs and trend-followers, heavily long after the six-month rally, crossed short-term sell triggers. BNP Paribas estimates another $50–100 billion of medium-term supply sits above current levels if 6,456 is regained on any relief rally.

6 Short interest is rebuilding
CBOE put/call ratios rose to 1.0 from 0.7 in October, and CFTC data show hedge funds have moved to near-neutral net positioning in S&P 500 e-minis.

7 Global weakness compounded the move
SK Hynix fell 2 per cent despite record quarterly revenue, and SoftBank dropped 3.5 per cent in Tokyo on renewed tariff concerns.

8 Liquidity evaporated
Top-of-book depth in S&P 500 e-minis averaged only $5 million per side versus a year-to-date norm of $11 million, with bid-ask spreads widening 40 per cent.

9 Passive dominance amplified the swing
ETFs accounted for 41 per cent of total U.S. equity volume, well above the 2025 average of 28 per cent. When macro overwhelms fundamentals, price action becomes more binary.

The broader question now: Is the market pricing a Federal Reserve policy mistake (no December cut leading to renewed tightening conditions), or is it forcing the hawks back toward easier policy?

Either way, volatility has returned with force. On Wall street, VIX futures are pricing 25 per cent annualized volatility into year-end — the highest since April. At Solomon Grey Capital we are watching the 3,500 zone closely for potential long-term entries.

History rarely repeats, but it often rhymes. Stay vigilant.

John Ian Lau

Solomon Grey Capital