Investor Algorithms Cry as Momentum Stocks Throw Midyear Tantrum
KEY POINTS
- •Momentum stocks, led by chip giants like Micron, AMD, and Intel, outperformed the S&P 500 in the past year.
- •The momentum trade’s sharp selloff began on June 22, shortly after the Federal Reserve’s June 18 interest rate decision.
- •The iShares MTUM fund dropped about 11% amid rate uncertainties, marking its worst monthly performance since early 2022.
In the dramatic saga of 2026’s stock market soap opera, momentum stocks—those greedy thrill-seekers who've been riding high for a year—started tripping after June 22, exactly when short-term interest rates decided to spike following Kevin Warsh's Fed rebranding party on June 18. The iShares MTUM ETF, the momentum crowd’s golden goose, slid roughly 11% in a single week, marking its nastiest correction since early 2022's Fed rate scare sequel. Meanwhile, chip titans like Micron (up 200%) and AMD (strutting up 140%) watched their upward glory fade like last year's TikTok trends. All this proving that math whizzes can spot trends but can’t predict when the Fed makes the market do the financial cha-cha.
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(1 of 3)Momentum stocks were having their second half party until the Fed crashed it with some interest rate gatecrashing. Now watching chips drop like bad poker hands in a Vegas bluff.
Momentum traders treat rising stocks like a pizza conveyor belt—until the Fed flips the switch, and suddenly it's cold leftover chaos.
2026's momentum craze climaxed faster than a TikTok dance trend, courtesy of Fed chairman Kevin Warsh and his surprise rate moves.
Source: Axios | Published: 7/9/2026 | Author: Matt Phillips
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