Reversal. Wall Street is suddenly shedding some of its favorite plays.

The Nasdaq Composite fell 0.9%, while the S&P 500 fell 0.5%. The Dow Jones Industrial Average dropped 334 points, or 0.7%.

Mizuho’s Daniel O’Regan told me earlier today that the selling this afternoon was concentrated in some of the “most speculative areas of the market.”

O’Regan wrote after the close that high beta stocks had one of their biggest drawdowns of the year, though most of the market rallied off its lows as the afternoon rolled on.

O’Regan wrote that he started to see some dip buyers late in the day. He thinks a lot of the unwind was driven by quantitative trading and the retail crowd, rather than active managers.

Still, speculative areas of the market have been struggling in since Oct. 14, writes Bespoke Investment Group co-founder Justin Walters. He points out that the decile of the Russell 3000 that did the best from Aug. 1 to Oct. 14 is down 5.7% on average since then, while stocks that gained more than 150% in that span are down 20% on average since.

Such stocks include plays in the nuclear, quantum competing, crypto, and space trades.

“It appears that, at least temporarily, the music has stopped and the party has ended for the most speculative names,” Walters writes. “No one knows when the music will pick back up again, but usually, the higher they go, the harder they fall.”

-	Last	Chg%
↓ Dow Jones Industrial Average	+46,590.41	-0.71%
↓ S&P 500 Index	+6,699.40	-0.53%
↓ NASDAQ Composite Index	+22,740.40	-0.93%

10/22/2025, 8:00:34 PM ET

The Hot Stock: Intuitive Surgical +13.9%
The Biggest Loser: Lennox Internationa -10.2%

Best Sector: Energy +1.2%
Worst Sector: Industrials -1.3%

A Not-So-Magnificent Start

Tesla kicked off earnings season for the Magnificent Seven, but it didn’t stick the landing.

The electric vehicle firm reported adjusted earnings of 50 cents a share, which came in below analyst expectations at 57 cents a share, my Barron’s colleague Al Root reports. Al writes:

Operating profit for the third quarter dropped 40% despite a 12% rise in total sales. Sales topped estimates as Tesla sold a record 497,099 EVs in the third quarter.

However, third-quarter profit margins didn’t improve as much as expected. Tesla’s automotive gross profit margin net of regulatory credit sales was 15.3%; Wall Street had expected closer to 15.5%.

Third-quarter operating profit margins landed at 5.8%, down from 10.8% in the year-ago period. Wall Street was looking for operating profit margins to be closer to 7%.

Lower pricing explains some of the margin miss. The average realized price for a Tesla in the quarter was just shy of $42,000, down from about $42,200 in the second quarter.

During the company’s earnings call, CEO Elon Musk was asked first about the firm’s robo-taxis. Al writes:

CEO Elon Musk said Tesla is expecting to have no safety monitors for the company’s robotaxi service in Austin, Texas, by the end of 2025. “We are being very cautious with deployment…even one accident will be front page news,” he added.

Tesla has driven about 250,000 driverless miles in Austin, Texas, where the company launched a robotaxi service in June. The safety monitors in the Austin robo-taxis are located in the front passenger seat. In the San Francisco Bay Area, where Tesla has driven one million robotaxi miles, safety monitors sit in the driver’s seat.

Despite the caution, Tesla says it wants to be operating in eight to 10 metro areas by the end of 2025, pending regulatory approvals.

Those comments are similar, but a little more modest, than what Musk said in July. Back then, he said robotaxi service areas might cover half the U.S. population by the end of 2025. The top 10 U.S. metropolitan areas—which includes the New York City and Los Angeles metro areas—represent around 25% of the total U.S. population.

Microsoft, Meta Platforms, Alphabet, Amazon.com, and Apple all report results next week. Nvidia will wrap up Mag 7 earnings in November.

You can read Al’s full Tesla earnings coverage here.

The Calendar

Blackstone, CBRE Group, CenterPoint Energy, Deckers Outdoor, Digital Realty Trust, Dover, Dow, First Citizens Bancshares, Ford Motor, Hasbro, Honeywell International, Intel, Newmont, Norfolk Southern, PG&E, Pool Corp., Roper Technologies, Southwest Airlines, Textron, T-Mobile US, Tractor Supply, Union Pacific, Valero Energy, and West Pharmaceuticals report quarterly results tomorrow.

What We’re Reading Today

• NHL Breaks the Ice in Sports Betting With Prediction-Market Partnerships

• Moderna Drops Vaccine for Birth Defects After Trial Failure

• Beyond Meat and Gold Are Wall Street’s Odd Couple. It Must Be FOMO.

• OpenAI’s New AI Browser Shows the Future of the Internet. There’s a Catch.

• SAP Stock Drops After Earnings. Cloud Revenue Fell Short.

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