Wall Street Goes All-In on Risky Stocks
(Bloomberg) — Investors are piling into speculative and volatile edges of the stock market, throwing caution to the wind as the S&P 500 Index closes in on an all-time high.
Most Read from Bloomberg
-
US Renters Face Storm of Rising Costs
-
Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares
-
Mapping the Architectural History of New York’s Chinatown
-
Squeezed by Crowds, the Roads of Central Park Are Being Reimagined
-
US State Budget Wounds Intensify From Trump, DOGE Policy Shifts
High Yield Savings Offers
Earn 4.10% APY** on balances of $5,000 or more
View Offer
Earn up to 4.00% APY with Savings Pods
View Offer
Earn up to 3.80% APY¹ & up to $300 Cash Bonus with Direct Deposit
View Offer Powered by Money.com - Yahoo may earn commission from the links above.The risks remain: President Donald Trump’s tariff pause is scheduled to end in two weeks, signs of a slowing economy and weakening consumer sentiment are mounting, and war is rumbling in the background. Wall Street strategists are encouraging everyone to buy stocks with strong balance sheets that can withstand any sudden shock. But investors appear to be ignoring all of it.
The Invesco S&P 500 High Beta ETF, an exchange-traded fund that tracks highly volatile stocks, is on track for its best quarter since 2020 relative to the Invesco S&P 500 Low Volatility ETF. Meanwhile, a Goldman Sachs gauge of stocks with weak balance sheets is eyeing the best month relative to the S&P 500 since January.
“This is the very beginning of a period of FOMO that happens in the late stages of every structural bull market — every single one,” said Julian Emanuel, chief equity and quantitative strategist at Evercore ISI. “What we are surprised by is the speed at which speculation has been embraced given the record bearishness just a little over two months ago and also in light of what continues to be significant economic and policy uncertainty.”
The key is individual investors, who favor momentum plays like big tech stocks and speculative names. They kept buying even in early April when the S&P 500 teetered on the brink of a bear market and institutional money managers sold out during the depths of the tariff-fueled market meltdown.
Buying Dips Works
“Let’s go back to the various dips that we’ve seen in the market, starting with Covid,” said Paul Nolte, market strategist and senior wealth adviser at Murphy & Sylvest Wealth Management. “Every time that the market declined in a very short fashion, investors have learned: Buy the dip and buy the higher-beta type stocks.”
Large-cap technology behemoths have been the main drivers of the markets in the past two years. They had a brief hiatus earlier this year when the rise of Chinese artificial intelligence startup DeepSeek raised concerns about who will dominate AI, but tech giants are back in the driver’s seat, leading the sharp recovery in the S&P 500 since the tariff selloff.
Story Continues“Once the tariffs kind of de-escalated, investors came back to the dominant theme, which is AI,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.
This strong focus on big tech is even holding back one risky corner of the market — small-cap stocks. The small-capitalization Russell 2000 Index and the S&P 600 Index, which unlike the Russell only includes profitable smaller companies, are both lagging the S&P 500 this year and quarter.
Strategists point out that technology has a relatively lighter weight in these small-cap gauges. Information technology and communication services together have a nearly 43% weight in the S&P 500, but just 13% in the Russell 2000 and and about 16% in the S&P 600.
The strength of tech firms is also driving profit growth at the index level. The S&P 500’s earnings this year are estimated to grow about 8% from last year, with information technology the strongest anticipated gainer at nearly 21%. Expectations for other sectors pale in comparison.
“In a time of uncertainty around earnings, investors are gravitating towards areas that have more of a secular theme,” Truist’s Lerner said.
(Updates Goldman Sachs gauge performance in third paragraph.)
Most Read from Bloomberg Businessweek
-
How to Steal a House
-
Inside Gap’s Last-Ditch, Tariff-Addled Turnaround Push
-
America’s Top Consumer-Sentiment Economist Is Worried
-
Apple Test-Drives Big-Screen Movie Strategy With F1
-
Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags
©2025 Bloomberg L.P.
![Electric Axle Drive System Market on the Rise [2028]- A Deep Dive into the Growth & Forecast](https://antiochtenn.com/zb_users/upload/2025/07/20250717215054175276025475810.jpg)
Wall Street's decision to go all-in on risky stocks reflects a bold gamble aimed at maximizing profits from the current market volatility, yet it also signifies an association of extreme risk with potential for fast returns; executing such strategies require savvy insights and meticulous planning.
The reckless decision by Wall Street to go all-in on risky stocks illustrates the feverish pursuit of short term gains at risk of longterm destabilization, a Mrs. Murphy move that calls for enhanced regulation and investor education amidst market mania."
The sheer volume of capital pouring into risky stocks by Wall Street firms demonstrates an unprecedented level of risk-taking under current market conditions, a gamble that could yield immense profits but also amplified losses if the tide turns.
As 'Wall Street Goes All-In on Risky Stocks,' a dangerous fusion of greed and uncertainty emerges, challenging the foundations that once guided investors towards conservative yet fruitful decisions.
With the Wall Street trading in risky stocks full steam ahead, investors must navigate a hazardous course amidst heightened speculative risks yet pursue opportunities where bold moves pay off.
With Wall Street embracing riskier bets, investors must navigate not just uncertainty but also a quiver of untested corporate and market dynamics—a treacherous high-stakes game.
The recent surge in Wall Street's all-in bet on risky stocks signals an audacious gamble with the potential for massive gains, though carries sufficiently high risks that could lead to significant losses if miscalculated.
In a risky赌博play for gains, Wall Street's influx into speculative stocks signals an all-in attitude on uncharted waters - betting big even in the face of instability.
The recent stadium of Wall Street trading in risky stocks heralds an unprecedented wave for portfolio management, demonstrating a bold pursuit aimed at significant returns but revealingІ a profound risk appetite unlikely to be limited only by the status-quo.
In the wake of 'Wall Street Goes All-in on Risky Stocks', investors must tread carefully, as a daring dive into risky assets could lead to unforeseen consequences if market volatility ensues.
