Market Sell-Off Intensifies… And The Tech Wreck’s Next Move 3/10/25

0:01Live from the Nasdaq market site on a day where the major indices hit their lowest levels in nearly six months. This is Fast Money. Here's what's on tap tonight. Stocks sinking to start the week. The Nasdaq now solidly in correction territory. The S &P 500 closing below its 200-day moving average for the first time in 16 months. The Dow is shedding nearly 2 ,000 points so far this month. How much furthers are left to fall and how do you protect yourself against the drop? Plus, Delta's disappointing guidance. What's got the stock on the move after hours and how it's playing out for the rest of the travel trade?

0:31And we're watching Oracle shares after its latest earnings report. Crypto crashing as Bitcoin's drop below 80K takes the rest of the digital asset space down with it. And the chart master lays out a couple stocks that might be buying opportunities after this sell-off. I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ on the desk tonight, Carter Braxtonworth, Dan Nathan, Guy Adami, and Julie Beal. We start off with a sea of red on Wall Street. The Dow dropping nearly 900 points for its worst day since December. The S &P 500 down nearly 3%, hitting levels not seen since back in September.

1:01And the Nasdaq, the worst-performing index today, down nearly 5 % at lows. The worst day for tech since the fall of 2022. Continued fears about a potential recession and the uncertainty around tariffs weighing on the markets. It was a day filled with massive moves in the mega caps. Apple losing$175 billion in market cap today. Tesla giving back all of its post-election gains on its worst day since 2020. It is now worth less than half of what it was at its mid-December peak. NVIDIA hitting its lowest levels since September, losing a trillion dollars from its high. And Meta giving up all of its gains and then some from that 20-day winning streak.

1:37Overall, every single MAG 7 stock is now in correction territory. Collectively, they have lost three quarters of a trillion dollars in value in just the last two trading sessions. So, what do we do here, Guy? Superlatives are continuing. I mean, it's fascinating. What we've said for a while now, at least for me, incorrectly has been that there are a lot of headwinds out there, but the market was looking past them for whatever reasons. But despite the fact that the market seemingly made new highs every day, those headwinds weren't going away. As a matter of fact, some of the concerns were actually getting worse.

2:10And what we said was the market will have less and less room for error and volatility was going to be a story. Well, you're seeing that now. I don't know if it was tariffs. I don't know if it was a fear of a slowdown. But it just goes to show you when you're trading at the valuations that we're trading at, everything has to continue to go right. And it's not. In terms of the downside, it feels to me like we didn't have capitulation today. People say it was panicked. I didn't see anything panicky about it. Yes, the VIX is elevated. It will stay elevated. Panic will come in the form of a huge volume day where we may be flush early and spend the rest of the day rallying.

2:46That did not happen today. What do you think? Well, I mean, maybe just put it all in context. rather than my opinion or anyone's, we know that the market has drawdowns. Sell-offs, drops, declines, corrections, you choose your nomenclature. As of now, we are down 9.5 % from the peak, and it's lasted 13 sessions. If you look at all instances, going back to 1927, where the S &P has had a 5 % plus decline, the average decline is about 11.25, the median is about 8.75, and it takes place over 30 sessions on average. So this is sort of normative. Now, at the index level, we know the market's down, what, 4.5 % for the year?

3:22But the average stock is still up. And more stocks in the S &P are up than down, which would get around to say, is this nothing and nothing's happened? Or there's that much more to come? I would go with the latter. There's more to come. Yeah, I would just say that, you know, the Trump trades, they started to reverse a while ago. And it started in and around the time that we started dialing up, you know, the rhetoric in and around the trade war. And one of the things that kind of strikes me, and we talked about this a lot, that the first Trump administration seemed to be very focused on the stock market.

3:49When you think about how they went about some of the economic agenda that they wanted in the first one, they went after tax cuts first. And they got tax cuts. And it juiced the stock market. It juiced the economy. Then they got into the trade war, which really didn't cause too much trepidation in markets, not until we got to the end of 2018 when we had a growth scare, when we also had rates going higher. So if you think about what they did now, it's a bit of an own goal for all intents and purposes. No one knew how this was going to play out. I don't think they thought it was going to play out.

4:19I hear a lot of people talking about, well, they wanted to tank the economy. They wanted to tank the stock market to get things going higher. There's no way that is true. I keep hearing that. And it's probably what? You just pointed to yourself. No, I didn't. Guy's raising his hand. So I was just curious. Hi, Guy. Did you want to interject? I'm waiting for the camera person to show me raising my hand. He said own goal, and you just didn't even – you don't know what that is. And until earlier today, I didn't know what it is. You didn't know what that was? But apparently in, like, the Premier League in football, if a defender would have kicked the ball into his or her own net, that's an own goal.

4:56It's something like you've made a mistake, and it hurts your own team. Is that accurate? Correct. And it could be a header also. But I guess my point is when you think about what's going on here, you know, we've been talking about this for a couple weeks. They're playing chicken with the U.S. economy, which means that they're playing chicken with the global economy. And when you think about the potential for, you know, I guess the idea of weakening your northern neighbor or weakening the economy of your southern neighbor or weakening the economy, the economy of Europe, it just doesn't make a whole heck of a lot of sense.

5:25So the market has gone down in front of that. Yields had gone down initially. Look at the way the dollar traded. So what's going on in the stock market, I would argue with Guy a little bit. I see a lot of panic and a lot of stocks that possibly overshot to the upside that were trading at valuations that nobody could really justify except folks were willing to justify because of the expected growth or so. So to me, I think the S &P probably has a little more room to catch up. They tried to rally it at the end of the day. It wasn't particularly that impressive. If you're looking at some of the names that led to the downside, they didn't really bounce much.

5:56All right. And you want to go to Julie. I get it. But I'm going to push back on Dan's pushback. In terms of no panic. Oh, there is panic. When stocks go up in levels that we've seen stocks go up the way they go, nobody talks about panic then. They say how the fundamentals are in place and the market is behaving properly and everything is fine. So we can see panic to the upside the same way you can see it to the downside. So I would submit I've seen panic to the upside where people feel like, oh, my God, I'm going to miss it. This didn't feel like not yet, at least to the downside. They call it something else.

6:28They call it FOMO. And that's exactly what fueled the AI trade. Listen, we saw this in Palantir. We saw it in Apple. We saw it in Broadcast. And there was a fundamental case for every single one there, which was supposed to be sort of defensive, right? Correct. The EI spend was going to be intact, Julie, because it was going to bring massive efficiencies and cost savings, and nobody wanted to be left out on. Here we are now with the air coming out of this trade or gone, maybe.

6:59there's a very clear reason why no one likes a very narrow market right and it's exactly what's happening right now you suddenly have a strong correction and it makes everyone started to look around and say can this work without the strength of the ai companies that have been driving so much of the growth and i think the real challenge is it could if the economy were in good shape And to me, that's a really debatable question because not only do we have just the little whisperings of challenges in the labor market, not only is manufacturing been really difficult, but now you have a lot of boardrooms, lots of CEOs that are feeling very uncertain and very unwilling to make bold CapEx plans, bold hiring plans, bold investment plans.

7:42That really constrains what's going to happen in the economy, right? It's not the loss of jobs that really, really paralyzes demand. And it's people's fear of losing jobs. It's a much broader impact. And I think that's kind of what we're starting to see early on. Yeah. And it starts at the federal government level. I mean, imagine all the contractors and government employees who are concerned that their job is not going to be there tomorrow. And that's just the tip of the iceberg guy. I mean, Steve Leeson was making an interesting point today about the economy. And that is usually in a slowdown, you have the ballast of government spending to help the economy along.

8:17And this time, they are doing just the opposite. They want to slash government spending. You know, yes, that is correct. I didn't see that, but he's spot on. And I'll say this as well. You know, the health of the consumer, and we hear it over and over again if you watch, and it becomes sort of monotonous and it just becomes background noise at a certain point because everybody's convinced the consumer's in great shape. I am not convinced of that. And I'll say this. You know, when the consumer gets scared, it's typically they're scared because something happens in the market. Not to suggest that everybody owns stocks.

8:46That's not it. But when they lead tonight on the 6 o 'clock evening news with Big Sol in the stock market, people take notice and they start having the conversations. Should I buy that coffee? Should I go on that trip? And that's when spending stops on a dime. Yeah. The other thing about the policy stuff, if this is really what caused the acceleration of the downside over the last couple weeks or so, it's like we saw this last, well, I guess over the last month or so, threats of tariffs. You put the tariffs in. Then you pull them back. Then you get the stock market down. Let's say it's down 15 percent a week, week and a half.

9:16Then you basically say, you know what, just kidding. You know, it's just not a good way to message about an economy, to Guy's point, that's kind of already on the brink of slowdown. And, you know, this also brings me back to 2019. You know, we had this big snapback after the big Q4 drop. I think it was about 20 percent or so. The Fed had to pivot. Right. And I keep hearing if the tools in their toolbox don't work in a stagflationary environment, At least that's what a lot of economists or strategists saying is like this is the exact wrong time to mess around with an economy that's already starting to weaken, which is what happened in 2019, which is probably why when we actually had a black swan event, we've never had a black swan event, at least as long as I've been in the markets, why we dropped so quickly.

9:58Because, again, the Fed did lower interest rates to zero. We did have fiscal spending, but it didn't matter until people came to their senses a little bit after about a month or so. Well, Sidney's out with a new note telling investors to stay hedged and be patient. Stuart Kaiser is behind the call. He's the firm's head of equity trading strategy. You must have been busy today. What were the incoming calls like? Yeah, you know, I think it's a lot of what you all discussed. You know, the positive, I guess, where people are trying to ask is, is it time to buy the dip? So I think that means, you know, to Carter's point, you've pulled back enough where people are kind of answering that question.

10:31Our view is no, it is not time to buy that dip, mostly because this has been, it has been about the economy. me, it has been about Trump policy. But in the end, what's really impacted the market is just position destruction. And the stocks that are under pressure are the popular longs, the winners from the last 12 to 18 to 24 months. And those stocks were down more than 5 % today. In our measure, they're down over 20 % in the last month. And until you see some stability in that part of the market, I wouldn't confidently want to step in and buy the book here. You know, when you think about, again, the safety trades, as you were talking about, a lot of folks felt really comfortable in the Mag 7.

11:03They felt really comfortable in the banks. You know, some of the flows that you're seeing, going back to what Mel just asked you, what seems a lit, I don't know, I was going to say scary. I don't mean that. But like, if you think there's lower lows that happen, what do you think leads to the downside here? Is it like financials? Because to me, I'd be more worried about that. At some point, this MAG7, you know, secular shift as far as, you know, generative, that'll get back on its horse. It needed some froth to come out of it. But the banks kind of worry me here. Yeah, I think the banks and then the power generation story or two that we've got like a close eye on because those are not retail trades.

11:36You know, to your point, eventually retail is going to want to own Apple or Meta or Tesla at levels that are 20, in Tesla's case, 50%, you know, below peak. But the banks and PowerGen, those utilities, I think those are clear institutional trades. So I think one day last week, we saw the banks down about 3%, definitely got our attention. A couple of the popular utilities were down double digits last week as well. So I agree, banks and PowerGen are two from an institutional perspective. I keep an eye on it. But again, they have not shown the stability in our view that you need to be confident to put capital at risk right now.

12:05So, Stuart, at the institutional level, of course, the individual has choice, free will. You can sell. You can buy. Long, short can do that. But the big long only, fully invested all the time, not allowed to hold cash, that's the game. And they're playing from the same point as always. The S &P pure value index since the market's peak on the 19th is down 1.2, whereas the pure growth is down almost 12. You're talking about 1 ,100 basis points of spread. For those who have to play, what are you saying or recommending in this environment? Look, I think the growth value also has a lot to do about positioning, also about what's going on in interest rates.

12:35I think long-onlys have two concerns. Number one is if you look at late January, early February, you got that really bad University of Michigan sentiment print. That kicked off three out of four weeks with net outflows from ETFs and passive mutual funds. So to your point, long-only has to hold, but they've also seen some money being pulled out, which means they've had to contribute as well. Generally speaking, I'd rather be in growth than value here. Logic being that you have three broad outcomes. You have a hard landing. I think growth outperforms value in a hard landing. Higher for longer. I think growth probably outperforms in a higher for longer environment.

13:07You really need this immaculate sort of reacceleration in the economy to get small cap and value working. So just in our view, like probability adjusted, you're more likely to be happy in growth than value. But to your point, it has not worked year to date. And I wouldn't blame people for being skeptical. Stuart, I'm sure there are people sitting around saying, you know what, the market sells off enough, the Fed is going to bail us out like they have over the last 20 or so years, which maybe they will. I don't have a view. But what I will say is we have CPI on Wednesday. And if that were to come in hotter than expected, it backs them into a corner that they're already in.

13:38So maybe speak to the importance of the number this Wednesday. Yeah, I agree with you 100%. I mean, we talked about earlier in the year, the risk for the Fed is that, you know, if you are cutting government spending at the same time you're introducing tariffs, you create pressure for the Fed on both sides of the dual mandate. So the number is very important. If you remember back to early February, you would had you miss inflation expectations had ticked up. Average hourly earnings had ticked up. And that made that inflation print really, really powerful. We got past that. OK, so the Fed will be watching this.

14:05They've been very methodical, I think, about communicating that, you know, inflation risk is not a near term concern. So I think you need a pretty hot print, especially after average hourly earnings got revised down. That said, options markets pricing, You know, 1.4 % move on CPI. Markets telling you it's important. To your point, for the Fed, it's important. So it matters. Oddly, and I may never say this again in my career, I think UMICH might be more important than the CPI this week, though. Are there any levels on the S &P 500 that are sort of witching levels, in your view, whether it be levels that you're watching, levels that hedge funds are watching, levels that CTAs are, you know, exposed to?

14:41Look, I mean, CTAs are max short across all the U.S. benchmarks right now, which actually, to some degree, you might read as a positive sign. that systematic supply has come in. Again, I wouldn't put a number on the level at this point. To me, it's show me those core long positions that are just getting eviscerated. Show me that those have stabilized. And regardless of the level, I think I'd be more positive about kind of reentering the market. I'm sure the big round numbers will matter. I'm sure there's a technical support level. We're already through the 200-day. That was obviously a big level, which we defeated already.

15:07So not a level in particular, but more it's what is going on internal to the market. Do these momentum trades, these tech trades, these sort of hedge fund favorites find their footing or not. Stuart, great to see you. Thank you. Stuart Kaiser of Citi. Water levels you're watching, Carter, Mr. Technician. Yeah, well, I mean, the truth is there are no levels of support to speak of. There are no levels. No, no. Support is where a lot of transaction took place. Then you move well above it and you come back to it. We've just been ascending. And so as you roll in principle, there's no great level to identify.

15:39But on a day to day basis, and you see that intraday, there's always this desire to, hey, maybe it's overdone, and we rally off the low. The net effect is, again, remember, the average stock, the performance of all S &P 500 stocks, is still up on the year, and so is the median. And the aggregate itself is down only 4.5. Not much has happened. Right. How are you feeling? I mean, for him to say, just wait. Yeah. Well, we're going to talk about later, like, signs that maybe you've seen capitulation. So I don't want to get ahead of that. But I'll say, you know, it doesn't feel like it's happened yet.

16:10and people say, what are you talking about? The market has been selling off. People aren't used to it. The complacency that's been around the investing and the trading community is such that it's made a lot of sense. You've been rewarded to be complacent. But I've said for a while, now it's seemingly starting to be correct that volatility is going to be a thing this year that people have not experienced. It's been a one-day event until recently. Now we're two weeks into this, and I still think it goes higher from here. Yeah, so if we look at the NASDAQ 100, which is interesting to me because headed into the bear market of 2022, no one knew it was going to be a bear market.

16:43Let's be really clear. But once we were really in a very systematic sort of sell-off period, to me, I kept on hearing that the prior leaders of the bull market weren't going to be the leaders on the way out. The way that the indices are constructed, there's really no other way to do that. So I'm in the same mindset right now. And if you look at the QQQ, to me, we had it down 38 % at its lows in 2022. Right now it's down, what, 11%, 12 % or something like that. But a lot of the major components are down a lot more, which speaks to what Carter just said. There's plenty of stocks that are acting okay, but you're taking the froth out of the market.

17:17I think the QQQ is the way to play on a sustained sell-off. You just keep dollar cost averaging it in. In two years, you'll be pretty happy about that because we haven't had a projected bear market since 25 years ago. And I just don't see it likely to happen when you consider the names that have been leading the economy as far as CapEx and investment and the ones who are basically concentrated in the major indices. Also, if you put in the context, of course, nothing's happened to the downside around the world. The stock 600 is up on the air. The DAX is up. And so if you saw true panic, you'll start to see it happening in things that have held out.

17:51I mean, the correlation between the MSI All Country World Index and the All Country World Index x the U.S. is about 85 percent. So you're not going to have a situation where the S &P stop is dropping 15, 20, and the rest of it's just going up. At some point, they succumb, too. That would be something to watch for. All right. Meantime, shares of Delta sinking after the airline slashed its Q1 guidance. Our Phil Lebeau just spoke with CEO Ed Bastian in the last hour. He joins us with more on this. Phil. Melissa, this is guidance for the first quarter where Delta has brought down its expectations and brought them down substantially, but they are not changing their full-year earnings guidance.

18:24So for the first quarter, here's the new guidance. earning 30 to 50 cents a share, previously expected to earn between 70 and a dollar. So they've cut it basically in half. Revenue up 3 to 4 percent, previously expected it to grow 7 to 9 percent. Operating margin 4 to 5 percent versus the previous guidance of 6 to 8 percent. Essentially, they're seeing softness in domestic demand. Here is CEO Ed Bastian. We saw companies start to pull back in terms of corporate spending, started to stall. Consumer spending started to stall, largely domestic, largely in the close end. But it was also exacerbated as the uncertainty that's out there.

19:05And consumers in a discretionary business do not like uncertainty. And while we do believe this will be a period of time that we pass through, it is also something that we need to understand and get to calmer waters. We asked Ed Bastian if there are industries where they're noticing particular weakness. He's pointed out aerospace and defense, automotive, entertainment. They have a big hub out in Southern California, so clearly they've had a lot of pressure out there, not just because of that, but they also had wildfires out there. Bottom line is this. They are seeing weakness in the first quarter.

19:39But, Melissa, what's interesting is that we're also noticing all of the airline stocks under pressure today, down anywhere between essentially four and a half to more than almost 11 percent for United Airlines. And tomorrow, the CEOs of American Southwest United, they will all be giving presentations in New York City at the J.P. Morgan Industrials Conference. You can bet the number one question that the analysts are going to have is, what are you seeing in terms of the economy right now? And what do you expect to see for the remainder of this year? Phil, thank you. Phil LeBeau. And of course, this after-hour slide is a continuation of the slide that we've already seen with the markets going down overall.

20:21Julie, there are real questions about whether or not people take cruises, book hotels and airplane tickets, et cetera. Yeah, I think it's really an indication that when you have this level of uncertainty, kinds of future planning like trips and things suddenly gets really put on hold. And we all learn that we can do a lot of our business online via Zoom. And I think there's a real recognition by a lot of companies, hey, let's just pump the brakes because we're really not sure what the world looks like. And let's conserve a little bit of cash. And that's fine for that company that really preserves its earnings power.

20:55The problem is that just ripples through the rest of the economy and it has long-term impacts on business confidence and just the willingness to put capital out. And I worry a lot because that becomes a little bit of its own self-fulfilling prophecy. And that's the real risk that I think we have in front of us. It's interesting to think that consumer confidence has turned that dramatically in, you know, since the last earnings report that Delta gave. Right. And what's even more interesting, it did that with the market basically being at an all time high and only starting to roll over over the last couple of weeks.

21:30So now let's see where it is. And, you know, this guidance, I mean, basically it cut first quarter guidance in terms of revenue and EPS in half. And if Tim was here, he's not. The ambassador would talk about correctly how airlines are the greatest trading names out there. And if you think about it, this was a$70 stock a few weeks ago. It's going to trade right now at 43. I think the August 5th low is 38. Tomorrow could be a capitulation day in Delta Airlines. If it trades 10 times, you know, 75, 80 million shares, you take a shot on the long side. Yeah, I'll just say this. And, you know, this is a business that we've chosen, Guy.